“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

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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

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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.

Disclaimer

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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. Geico earnings swelled 174% to $1.928 billion from $703 million a year prior. 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.

To be sure, Berkshire did trim its Apple stake by 13%. The iPhone maker remained Berkshire’s largest stock holding, however.

Berkshire also bought back $2.6 billion in stock, up from $2.2 billion in the fourth quarter of 2023.

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

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Yield-hungry retail investors piled into highly leveraged US exchange traded funds in April, drawn to volatile markets stoked by uncertainty over the outlook for interest rates.

Investors have pushed around $5.2bn into the top 22 leveraged ETFs, which can magnify potential gains and losses, in the year to the end of April, according to VandaTrack, a data company which monitors retail trading flows.

The inflows marked a reversal from the first quarter as investors pulled money out of passive funds while the benchmark S&P 500 repeatedly hit record highs. But fresh tensions in the Middle East and uncertainty about the path of US interest rates acted as a “catalyst” for investors to snap up leveraged ETFs “to speculate on the market falling or hedge long exposures,” said Ben Slavin, global head of ETFs at BNY Mellon Asset Servicing.

Data from Morningstar Direct, which covers a broader range of leveraged ETFs, indicated that a surge in retail interest in the last two months has also wiped out the outflows of $4.2bn in January and February. Altogether there were inflows of nearly $4.4bn in March and April, it found.

“Market timing is often the Achilles heel of day traders, and this time was no different,” said Bryan Armour, Morningstar’s director of passive strategies research. “Most of the top ETFs by March and April inflows had their worst monthly performance of the year in April.”

Although the inflows represent a sliver of the more than $200bn that has poured into the $8.9tn US ETF market this year, it has reawakened concerns that retail investors will be most exposed to sharp falls. Typically they use derivatives to deliver multiples of the daily performance of the benchmark or index they track.

Investors who use these sorts of instruments to chase potentially large short-term returns are inherently “much more susceptible to equity pullbacks,” said Marco Iachini, senior vice-president of research at Vanda Track.

Following their introduction in 2006, leveraged ETFs have proliferated across US stock markets. Issuers offer double or triple leveraged funds that can track a range of assets, from other ETFs, or specific indices like home construction or banks, bitcoin futures and popular individual securities like Tesla and Nvidia, among dozens of other securities. There are also leveraged inverse ETFs, which allow investors to hedge their exposure to sharp falls. Leveraged single stocks tend to be