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    Buffett says Berkshire sold its entire Paramount stake: ‘We lost quite a bit of money’

    OMAHA, Neb. — Warren Buffett revealed that he dumped Berkshire Hathaway’s entire Paramount stake at a loss.
    “I was 100% responsible for the Paramount decision,” Buffett said at Berkshire’s annual shareholder meeting. “It was 100% my decision, and we’ve sold it all and we lost quite a bit of money.”

    Berkshire owned 63.3 million shares of Paramount as of the end of 2023, after cutting the position by about a third in the fourth quarter of last year, according to latest filings.
    The Omaha-based conglomerate first bought a nonvoting stake in Paramount’s class B shares in the first quarter of 2022. Since then the media company has had a tough ride, experiencing a dividend cut, earnings miss and a CEO exit. The stock declined 44% in 2022 and another 12% in 2023.

    Stock chart icon

    Just this week, Sony Pictures and private equity firm Apollo Global Management sent a letter to the Paramount board expressing interest in acquiring the company for about $26 billion. The firm has also been having takeover talks with David Ellison’s Skydance Media.
    Paramount has struggled in recent years, suffering from declining revenue as more consumers abandon traditional pay-TV, and as its streaming services continue to lose money. The stock is in the red again this year, down nearly 13%.
    Buffett said the unfruitful Paramount bet made him think more deeply about what people prioritize in their leisure time. He previously said the streaming industry has too many players seeking viewer dollars, causing a stiff price war. More

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    Warren Buffett says Greg Abel will make Berkshire Hathaway investing decisions when he’s gone

    “I would leave the capital allocation to Greg and he understands businesses extremely well,” Buffett told an arena full of shareholders at Berkshire’s annual meeting.
    While Buffett has made clear that Abel would be taking over the CEO job, there were still questions about who would control the Berkshire public stock portfolio.

    OMAHA, Nebraska — Warren Buffett said Saturday his designated successor Greg Abel will have the final say on Berkshire Hathaway’s investing decisions when the Oracle of Omaha is no longer at the helm.
    “I would leave the capital allocation to Greg and he understands businesses extremely well,” Buffett told an arena full of shareholders at Berkshire’s annual meeting. “If you understand businesses, you’ll understand common stocks.”

    Abel, 61, became known as Buffett’s heir apparent in 2021 after Charlie Munger inadvertently made the revelation at the shareholder meeting. Abel has been overseeing a major portion of Berkshire’s sprawling empire, including energy, railroad and retail.
    Buffett offered the clearest insight into his succession plan to date after years of speculation about the exact roles of Berkshire’s top executives after the eventual transition. The investing icon, who’s turning 94 in August, said his decision is influenced by how much Berkshire’s assets have grown.
    “I used to think differently about how that would be handled, but I think that responsibility should be that of the CEO and whatever that CEO decides may be helpful,” Buffett said. “The sums have grown so large at Berkshire, and we do not want to try and have 200 people around that are managing a billion each. It just doesn’t work.”
    Berkshire’s cash pile ballooned to nearly $189 billion at the end of March, while its gigantic equity portfolio has stocks worth a whopping $362 billion based on current market prices.
    “I think what you’re handling the sums that we will have, you’ve got to think very strategically about how to do very big things,” Buffett added. “I think the responsibility ought to be entirely with Greg.”

    While Buffett has made clear that Abel would be taking over the CEO job, there were still questions about who would control the Berkshire public stock portfolio, where Buffett has garnered a huge following by racking up huge returns through investments in the likes of Coca-Cola and Apple.
    Berkshire investing managers, Todd Combs and Ted Weschler, both former hedge fund managers, have helped Buffett manage a small portion of the stock  portfolio (about 10%) for about the last decade. There was speculation that they may take over that portion of the Berkshire CEO role when he is no longer able.
    But it seems, based on Buffett’s latest comments, that Abel will have final decisions on all capital allocation — including stock picks.
    “I think the chief executive should be somebody that can weigh buying businesses, buying stocks, doing all kinds of things that might come up at a time when nobody else is willing to move,” Buffett said.
    Abel is known for his strong expertise in the energy industry. Berkshire acquired MidAmerican Energy in 1999 and Abel became CEO of the company in 2008, six years before it was renamed Berkshire Hathaway Energy in 2014.
    Correction: Berkshire’s equity portfolio is worth $362 billion. A previous version misstated the figure. More

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    Warren Buffett says Berkshire Hathaway is looking at an investment in Canada

    OMAHA, Neb. — Warren Buffett said that Berkshire Hathaway is looking into an investment in Canada.
    “We do not feel uncomfortable in any shape or form putting our money into Canada,” he told an arena full of investors Saturday. “In fact, we’re actually looking at one thing now.”

    The billionaire investor has placed bets in the country in the past. He’s previously taken a roughly $300 million position in Home Capital Group that investors took as a vote of confidence in the troubled Canadian mortgage underwriter.
    The “Oracle of Omaha” said during the annual shareholder meeting that he does not expect to make significant bets outside the U.S., saying his recent investments in Japanese trading houses were a compelling exception. But Buffett noted the similarity in operations between the Canada and the U.S.
    “There’s a lot of countries we don’t understand at all,” Buffett said. “So, Canada, it’s terrific when you’ve got a major economy, not the size of the U.S., but a major economy that you feel confident about operating there.”

    Warren Buffett walks the floor and meets with Berkshire Hathaway shareholders ahead of their annual meeting in Omaha, Nebraska on May 3rd, 2024.
    David A. Grogen | CNBC

    Buffett did not reveal the specific company he’s looking at north of the border or whether it was public or private.
    “Obviously, there aren’t as many big companies up there as there are in the United States,” Buffett said. “There are things we actually can do fairly well that Canada could benefit from Berkshire’s participation.”

    Canada’s S&P/TSX Composite Index is up about 5% this year. The economy has large financial and commodity industries.
    The Berkshire Hathaway shareholder meeting is exclusively broadcast on CNBC and livestreamed on CNBC.com.

    More from Berkshire Hathaway’s Annual Meeting More

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    ‘A lot of money on the sidelines’: Calamos Investments thinks ETFs should target CD, money market customers

    There may be an untapped market for exchange-traded funds.
    According to Calamos investments’ Matt Kaufman, there are trillions of dollars across CD and money market accounts, and it is a market ETFs should look to capture.

    “That’s larger than almost the ETF space itself,” the firm’s head of ETFs told CNBC’s “ETF Edge” earlier this week. “There’s a lot of money on the sidelines that could move into this.”
    Kaufman, who is in the interest rates will stay higher for longer camp, thinks structured and options ETFs designed for risk management and income can provide stability.
    “We saw it being difficult to get risk management and income from bonds when rates were so low,” he said. “As rates have moved … off of zero or 4, 5% now, we can afford to deliver capital protection over an outcome period. And, when you can do that, there’s a lot of opportunities to use these products.”
    Kaufman mentioned ETFs in this higher-rate environment can be particularly beneficial for people looking for opportunities to outpace inflation — especially retirees.
    “You can get greater than the risk-free rate. …Your money is linked to the market with no greater downside risk,” Kaufman added. “This is all tax-deferred growth.”
    Kaufman’s firm Calamos just started launching a suite of 12 structured protection ETFs.

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    Berkshire Hathaway operating earnings soar 39% as Buffett’s cash hoard swells to record $188 billion

    The Warren Buffett-led conglomerate posted an operating profit — which encompasses earnings from the company’s wholly owned businesses — that surged 39% to $11.22 billion from the year-earlier period.
    That gain was led by a 185% year-on-year increase in insurance underwriting earnings to $2.598 billion from just $911 million.

    Warren Buffett walks the floor ahead of the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska on May 3, 2024. 
    David A. Grogen | CNBC

    Berkshire Hathaway reported Saturday a huge year-over-year increase in operating earnings in the first quarter, while its cash holdings bubbled to record levels.
    The Warren Buffett-led conglomerate posted an operating profit — which encompasses earnings from the company’s wholly owned businesses — that surged 39% to $11.22 billion from the year-earlier period.

    That gain was led by a 185% year-on-year increase in insurance underwriting earnings to $2.598 billion from just $911 million. Insurance investment income also swelled 32% to more than $2.5 billion.
    Berkshire’s railroad business raked in $1.14 billion in profit, down slightly from the first quarter of 2023. Its energy division saw earnings nearly double to $717 million from $416 million a year prior.
    First-quarter net earnings, which include fluctuations from Berkshires stock investments, fell 64% to $12.7 billion. Buffett calls these unrealized investing gains (or losses) each quarter meaningless and misleading, but the unique conglomerate is required to report these numbers based on generally accepted accounting principles.

    Record cash hoard

    The company’s cash hoard reached a record high of $188.99 billion, up from $167.6 billion in the fourth quarter. That massive holding, well above a CFRA Research estimate of more than $170 billion, points to Buffett’s inability to find a suitable major acquisition target — which he has lamented in recent years.
    The report comes ahead the company’s annual shareholder meeting, known as “Woodstock for Capitalists.” Buffett will answer questions from shareholders on everything ranging from the conglomerate’s holdings as well as his thoughts on investing and the economy.

    This will also be the first annual meeting since the death of Vice Chairman Charlie Munger in November.
    Year to date, Berkshire Class A shares are up more than 11%, reaching an all-time high in late February. The Class B stock, meanwhile, has gained more than 12% in that time.
    Check out CNBC’s full coverage of this year’s annual meeting here. More

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    Warren Buffett’s Berkshire Hathaway cut Apple investment by about 13% in the first quarter

    Warren Buffett walks the floor ahead of the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska on May 3, 2024. 
    David A. Grogen | CNBC

    OMAHA, Nebraska — Warren Buffett’s Berkshire Hathaway cut its gigantic Apple stake in the first quarter as the “Oracle of Omaha” continued to downsize his one-time favorite bet.
    In its first-quarter earnings report, Berkshire Hathaway reported that its Apple bet was worth $135.4 billion, implying around 790 million shares. That would mark a decline of around 13% in the stake. Apple was still Berkshire’s biggest holding by far at the end of the quarter.

    This is the second quarter in a row that the Omaha-based conglomerate has trimmed the stake in the iPhone maker. It sold about 10 million Apple shares (just 1% of its massive stake) in the fourth quarter. This filing, when accounting for the change in Apple’s stock price, would imply Berkshire sold about 116 million shares.
    Buffett became a big fan of Apple after one of his investing managers Ted Weschler or Todd Combs convinced him to buy the stock years ago. Buffett even called the tech giant his second-most important business after Berkshire’s cluster of insurers.

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    Many has speculated that the 93-year-old investing icon reduced his favorite stake due to valuation concerns. Apple’s stock gained a whopping 48% in 2023 as megacap tech shares led the market rally. At its peak, Apple ballooned in Berkshire’s equity portfolio, taking up 50% of it. The shares are trading at more than 27 times forward earnings.
    Shares of the iPhone maker got a big boost in the past week after the firm announced that its board had authorized $110 billion in share repurchases, the largest in company history. However, Apple posted a decline in overall sales and in iPhone sales. The shares are down more than 4% so far this year amid concerns about how it will revive growth.
    It’s not without precedent that the Berkshire CEO would adjust the Apple bet. He sold a bit of the stock in the fourth quarter of 2020, but Buffett admitted then that it was “probably a mistake.” Also it’s not usual for Buffett to trim a position that has grown so large.
    Even with the sale, Berkshire is still Apple’s largest shareholder outside of exchange-traded fund providers. More

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    Star Wars was the first Lego license — 25 years later, it’s stronger than ever

    Disney’s Star Wars and Lego are celebrating 25 years of partnership.
    The team-up was the first time Lego had struck a licensing deal and became a framework for other franchises.
    Since 1999, Lego Star Wars has grown to become its own universe, with video games, apparel and more.

    Star Wars Lego models are seen at the Bricks & Figs museum in Krakow, Poland, on April 15, 2023.
    Anadolu | Anadolu | Getty Images

    If you are a Star Wars fan, Jens Kronvold Frederiksen may have crafted your childhood.
    A design director at the Denmark-based Lego company, he has spent the past 25 years creating Lego Star Wars sets.

    “I went to my boss and said, ‘Hey, you need me on this product line,'” Frederiksen told CNBC. “For me, it was just like a dream come true. Star Wars and Lego together, two things I love.”
    Frederiksen is not the only one. Since 1999, fans have rallied around the license, scooping up everything from Darth Vader mini figure keychains to $850 Millennium Falcon sets featuring more than 7,500 pieces. The brand has also grown to include half a dozen video games and a slew of animated content on Disney+. It also now has its own home on Epic Games’ popular online game platform Fortnite.
    The Star Wars license was the first of its kind for Lego, which had never created an official product line tied to licensed intellectual property before. In fact, the Jar Jar Binks mini figure was the first ever to feature a custom head sculpt instead of one of Lego’s iconic round faces, Frederiksen said.
    Now, Lego Star Wars has become a blueprint for the company’s other brand deals — think Harry Potter, Batman and Marvel’s Avengers.
    “We were creating themes, but we weren’t always necessarily connecting those with the deeper story,” said Jill Wilfert, head of global entertainment partners and content at Lego. “And I think for us really seeing that unlock, and how it really allowed people to open up their imaginations in a different way and express their creativity in a different way, is I think what Star Wars did for us.”

    Wilfert, who has been with Lego for 36 years, said there was a lot of trepidation at Lego prior to the Star Wars deal about doing any kind of third-party licensing.
    “Once we saw how well it translated and how people responded to it, it really did give us more confidence,” she said.
    The Lego Star Wars collaboration came at a time of financial turmoil for Lego. In the early 2000s, the company was dealing with high debt, stiff competition from digital gaming platforms and a portfolio that had become too diversified. Lego was on the brink of bankruptcy.
    Strong sales of Lego Star Wars as well as the Lego-owned Bionicle franchise helped keep the company afloat while it reduced its product lines and shut down noncore businesses. In 2005, the company launched a Lego Star Wars video game.
    “It’s been hugely successful and continues to be successful today as a gaming franchise,” said Paul Southern, senior vice president of third-party commercialization and franchise development at Disney. “It created the world.”

    A Force in the toy aisle

    Two decades later, Lego Star Wars remains one of the top-selling brands for Lego and the company sees strong sales even when there are no new theatrical releases tied to its product.
    The privately held company provides biannual glimpses at its balance sheet. In March, Lego reported that it grew sales 2% in 2023, even as the global toy industry saw sales slip 7%, according to data from Circana.
    The toymaker once again cited Lego Star Wars as a driving force behind those sales. Lego Icons, Lego Technic, Lego City and Lego Harry Potter also performed well.
    Although it was a smaller gain than previous years — the company saw overall sales jump 27% in 2021 and 17% in 2022 — Lego has continued to snap up market share in the toy industry. Much of that has to do with the fact that brands such as Lego Star Wars appeal to multiple demographics and generations.
    Lego sells sets at a variety of price points and difficulties, allowing kids to put together smaller, less complicated models and act out scenes from the franchise, while hardcore collectors can build more detailed replicas of their favorite ships, helmets and movie moments.

    A man looks pleased with his purchase of a Lego Star Wars landspeeder during Bricktastic 2024 at Manchester Central in Manchester, England, on Feb. 24, 2024.
    Shirlaine Forrest | Getty Images Entertainment | Getty Images

    The evergreen nature of the franchise is key. Lego can draw on nearly 50 years’ worth of content to delight consumers of all ages.
    “The main thing for us, of course, is that this is for kids,” Frederiksen said. “The model should be really fun and creative and inspiring to play with, but it should also be a great building experience.”
    That is why Lego takes some creative freedom with the sets that it offers. For example, an Imperial Shuttle is almost completely white. However, giving customers a pile of white bricks would make it “impossible to find the pieces and would not be a fun building experience,” he said. So, Lego offers some variation in the brick colors and details.
    While Frederiksen is not designing products anymore, he still builds everything. It is important to him to experience how each set comes together.
    To celebrate the 25th anniversary of the Lego and Star Wars partnership, as well as the 25th anniversary of “The Phantom Menace,” Lego is releasing numerous special sets. There is the TIE Interceptor model that retails for $230, a Mos Espa Podrace diorama for $80, a Droideka model for $65 and new BrickHeadz characters for less than $10 each.
    “What we see a lot with properties and with Star Wars, maybe more so than others, is it’s something that families do together,” Wilfert said. “Often, you’re first introduced to Star Wars through a parent, your parents grew up loving Star Wars, and we just see that having things in our portfolio that allow those connections and allow families to connect together, we’re really seeing the relevancy of that.”
    With new digital products such as video games and Fortnite, Lego can engage with younger consumers.
    “We are trying to make sure that we are in relevant places where we know kids are occupying their time,” Wilfert said.

    An even bigger galaxy

    The Lego Star Wars brand has evolved to encompass more than just bricks and mini figures — it has become its own ecosystem, said Southern.
    “The world of Lego Star Wars sits as a separate identity within our overall business, and that makes it very unique,” he said.
    Southern was at Lucasfilm when the partnership with Lego and Star Wars launched. He transitioned over to the Walt Disney Company when Lucasfilm was acquired a decade ago, so he has seen Lego Star Wars’ growth firsthand.
    Part of that growth is the humor that has become associated with the Lego Star Wars brand. This includes slapstick moments in video games and in animated content.
    “We’ve established an ecosystem and a tone of voice that allows us to do things, which, ultimately, are kind of a little bit cheeky, a little bit more fun,” Southern said.

    Lego Star Wars: The Skywalker Saga game allows players to relive the epic narrative of the Skywalker Saga told through the lens of hilarious Lego humor.
    Lego | Warner Bros. Games | Lucasfilm

    And that humor has extended to other franchises.
    “Star Wars, you know, allowed us to really open up people’s eyes to how Lego can create humor and charm to an [intellectual property] that might not exist,” Wilfert said. “We found that most of the IP owners are pretty willing to kind of let us play a little bit.”
    Between video games and animated projects, Lego has worked with franchises such as Harry Potter, Indiana Jones, Batman, Pirates of the Caribbean, Lord of the Rings, Marvel, Jurassic World and Pixar’s “The Incredibles.”
    But it all started with Star Wars, which keeps growing.
    “We’ve taken the passion that the fans and the kids have for that brand and we’ve taken that into other areas,” Southern said, noting, that along with video games, Lego Star Wars can also be found in the publishing section and even in apparel.
    The diversity of product and its strong sales led Disney and Lego to extend their contract for Star Wars through 2032.
    “The relationship has gotten easier because there are people who have been working on both sides all the way through the relationship,” Southern said. “They’re like family now. It’s very frank, it’s very open, very collaborative.”
    The long license lead time allows Disney and Lego to work together on long-term projects such as video games and animation, as well as celebratory sets for major anniversary milestones.
    “We’re celebrating 25 years of working together,” Southern said. “One of the things that is super important, too, is that we expect to be here in another 25 years, celebrating the way we’ve evolved our relationship and made it relevant for the generations to come.” More

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    Warren Buffett’s shopping extravaganza kicks off with Squishmallows pit, ‘Poor Charlie’s Almanack’

    Squishmallows in the images of Warren Buffett and Charlie Munger display at the Berkshire Hathaway Annual Shareholder Meeting at Omaha, Nebraska, on May 3, 2024.
    Sarah Min | CNBC

    OMAHA, Neb. — Warren Buffett’s annual shopping event, the pregame to Berkshire Hathaway’s annual meeting, is wowing shareholders flocking here this weekend.
    With over 20,000 square feet of showroom space and more than 50,000 items of inventory, the exhibit hall at the CHI Health Center features goodies from various Berkshire’s holding companies, from Brooks Running to See’s Candies to Jazwares.

    Only shareholders can participate at the event and they can buy items at a special discount.
    The annual meeting will be exclusively broadcast on CNBC and livestreamed on CNBC.com. The special coverage will begin Saturday at 9:30 a.m. ET.
    Jazwares

    Squishmallow pit at the Berkshire Hathaway Annual Shareholder Meeting in Omaha, Nebraska, on May 3, 2024.
    Sarah Min | CNBC

    Jazwares, the American toymaker best known for its Squishmallows plushie line, was a hit last year when it first displayed its wares at Berkshire Hathaway’s conference, including the debut of a Warren Buffett plushie. This year, the company expanded its exhibit in the convention hall, making it three times larger.

    Displays at the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nevada on May 3, 2024. 
    Sarah Min | CNBC

    Some highlights include the latest Squishmallows toys in the images of Buffett and his longtime Berkshire partner, Charlie Munger, a splashy Squishmallows pit, as well as other displays.
    ‘Poor Charlie’s Almanack’

    Charles Munger remembrance ahead of the Berkshire Hathaway Annual Shareholder Meeting at Omaha, Nebraska, on May 3, 2024.
    Sarah Min | CNBC

    The Bookworm only had one book to sell this year: “Poor Charlie’s Almanack: The Essential Wit and Wisdom of Charles T. Munger.” That was at the request of Buffett in honor of his business partner of more than 60 years, who passed away in November at the age of 99.

    FlightSafety

    FlightSafety at the Berkshire Hathaway Annual Shareholder Meeting in Omaha, Nebraska, on May 3, 2024.
    Sarah Min | CNBC

    Berkshire acquired pilot training company FlightSafety in 1996. At Friday’s shopping event, the firm brought a taste of what its training program looks like for professional pilots. Shareholders lined up to put on virtual reality glasses and experience the flight simulation training.
    Pilot Travel Centers

    Pilot Travel display ahead of the Berkshire Hathaway Annual Shareholder Meeting at Omaha, Nebraska, on May 3, 2024.
    Sarah Min | CNBC

    Truck-stop giant Pilot Travel Centers put up a big display with a real-sized red truck. The firm is largest operator of travel centers in North America, with more than 750 locations. Berkshire now fully owns Pilot Travel after buying the remaining 20% ownership interest from the Haslam family. The deal was not without drama as the Haslams last year sued Berkshire in a complaint that accused the conglomerate of using so-called pushdown accounting without authorization from the family.
    Duracell

    Duracell display at the Berkshire Hathaway Annual Shareholder Meeting in Omaha, Nebraska, on May 3, 2024.
    Sarah Min | CNBC

    In 2016, Warren Buffett’s Berkshire Hathaway bought Duracell from Procter & Gamble, offering the consumer giant $4.7 billion of the shares it owned in P&G in exchange for the battery maker.
    Brooks Running

    Displays at the Berkshire Hathaway Annual Shareholder Meeting in Omaha, Nebraska, on May 3, 2024.
    Sarah Min | CNBC

    Brooks Running attracted a long line of shareholders snapping up the 2024 special edition of its running shoes with “brk” on the side and a cartoon of a running Buffett on the insoles. Many shareholders are also set to participate in the Brooks “Invest in Yourself” 5K fun run and walk on Sunday, the morning following the annual meeting.
    Dairy Queen

    Dairy Queen display at the Berkshire Hathaway Annual Shareholder Meeting in Omaha, Nebraska, on May 3, 2024.
    Sarah Min | CNBC

    Warren Buffett bought Dairy Queen in 1998 in a roughly $600 million transaction, and has made trips to the Omaha locations with his great-grandchildren. According to The Wall Street Journal, the billionaire investor has said in the past that his favorite DQ order is a vanilla soft serve topped with chocolate syrup and malted milk power.
    Correction: Berkshire Hathaway’s annual shareholder meeting is held in Nebraska. Captions in an earlier version didn’t cite that state.

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