The Berkshire Beat: April 25, 2025

All of the latest Warren Buffett and Berkshire Hathaway news!

Happy Friday and welcome to our new subscribers!

Special thanks, too, to those who recently became paid supporters! ❤️

The annotated transcript for April will go out to paid subscribers early next week. This one is Alice Schroeder’s complete speech from the Value Investing Conference at the University of Virginia in 2008. (We already covered the Mid-Continent Tab Card Co. portion of this talk, but there’s so much more here.)

I always love to hear from Schroeder, who had unique access to Buffett and his inner circle while writing The Snowball: Warren Buffett and the Business of Life. This speech is a masterclass in understanding Buffett’s philosophy — not just as an investor, but as a thinker in general.

In particular, she takes some of Buffett’s most popular pieces of advice — the three pillars of value investing he learned from Benjamin Graham — and examines them in entirely new ways.

For my money, what sets this talk apart is her emphasis on Buffett’s identity as a handicapper. Schroeder argues that to truly grasp Buffett’s methods and mindset, you must first understand him through the lens of a handicapper — a perspective that blends analytical rigor with an almost intuitive sense of probability.

His knack for assessing odds, weighing risks, and spotting undervalued opportunities has been the through-line of Buffett’s career — from one of his earliest entrepreneurial efforts with the Stable Boy Selections tip sheet to his decisions atop Berkshire Hathaway.

Well, enough about all that. The transcript will be out on Monday or Tuesday. So, if you’ve been on the fence about upgrading, there’s no time like the present.

Now, with that bit of housekeeping out of the way, let’s move on to the latest news and notes out of Omaha…

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The best investors turn over every rock — and read every line of filings. In a new article,

Adam Mead

(author of The Complete Financial History of Berkshire Hathaway) shows how Warren Buffett’s careful reading of annual reports led him to label Kraft’s decision “particularly dumb” to sell its pizza business to Nestle in 2010. Basically, $1.2 billion of the $3.7 billion sale price was a non-cash gain for tax purposes. This meant Kraft sold a growing and profitable pizza business, which included iconic brands like DiGiorno and Tombstone, for a mere 7x pre-tax earnings. Buffett was not a fan.

• Speaking of Mead, I really liked this X post. It’s easy to lose sight of just how big the individual pieces of Berkshire are when compared to their peers.

Siri shakeup at Apple. Bloomberg reports that Apple’s new Siri engineering chief Mike Rockwell is replacing the group’s previous managers with new blood from the Vision Pro software group after last month’s embarrassing delay of Apple Intelligence functionality. Mark Gurman describes these new additions as some of Apple’s very best software engineering talent — showing the internal importance placed on this mop-up job.

• Why is the Vision Pro team — which, by all accounts, achieved merely unremarkable sales for its high-priced headset — seen as the “fixers” within Apple? “While Vision Pro hasn’t been a commercial hit,” writes Gurman, “Rockwell has shown an ability to take on major projects and persuade top leadership to invest heavily. He also created an operating system and product that are considered strong from a technology standpoint.”

This week, Apple also got hit with a $570 million fine from the European Commission for violating the Digital Markets Act. According to the EU, the iPhone maker has unduly restricted third-party app developers from informing users about alternative payment options outside the App Store. The fine sounds like a lot of money, but actually only amounts to ~0.5% of Apple’s net income. “Maybe Apple just considers this the new cost of doing business in the EU?” asks John Gruber over at Daring Fireball. “It’s not nothing, but it’s about 1/80th of the theoretical maximum fine the EU could have assessed.”

• Under this mind-boggling law, the EU could theoretically fine any offending company up to 10% of its global annual revenue. For Apple, that worst case scenario currently works out to $39 billion. So, in that light, this $570 million fine seems like little more than a slap on the wrist.

• Needless to say, the United States is not thrilled by Europe’s treatment of Apple (and Meta Platforms). “This novel form of economic extortion will not be tolerated by the United States,” said a White House spokesperson. “Extraterritorial regulations that specifically target and undermine American companies, stifle innovation, and enable censorship will be recognized as barriers to trade and a direct threat to free civil society.” Apple plans to appeal.

American Express continues to make its mark with the younger set. The company added 3.4 million new cardholders in the first quarter, with 60% of these newcomers from Gen Z and Millennials. Even better, these younger cardholders spent 14% more in the quarter compared to last year — significantly outpacing Gen X at 5% and Baby Boomers at just 1%. It’s just the latest evidence that AmEx has pulled off a successful rebrand from a card primarily for older, business-oriented users to that of a must-have for the younger generations with a wide range of perks and rewards that cater to them.

• CEO Stephen Squeri also reaffirmed expectations for 8-10% overall revenue growth this year.

BNSF Railway is locked in a dispute with rival Union Pacific over trackage rights through the Tehachapi Mountains in California. Now, the matter rests in the hands of the Surface Transportation Board. This critical route, owned by UP since its acquisition of Southern Pacific thirty years ago, serves as a vital artery for freight movement between Northern and Southern California. But, despite years of shared use, the two railroads cannot agree on a fair price — partly due to disagreements over double-stacked containers and how inflation should be calculated. “BNSF says UP’s proposal is 36x higher than the current agreement,” reports Trains.com, “and 22x higher than what BNSF has proposed. The two railroads filed their final briefs in the case this month. Barring a settlement, regulators will determine how much BNSF ultimately will pay UP for its continued use of the line.”

Chevron CEO Mike Wirth struck a cautiously optimistic tone about the American economy on CNBC this week. “There are no signs that we see at this point that we are in or close to a recession,” he told Squawk Box on Tuesday. “There are signs that growth might be slowing and we have to always be prepared for that.” Wirth also warned that if oil prices drop to or below $60 a barrel, there would likely be an industry-wide pullback in activity throughout the Permian Basin — the most prolific oil field in the United States.