The Greg Abel Era at Berkshire

**Barry Schwartz** (0:01)
Welcome to the Long Term Investing Podcast with Baskin Wealth Management. I'm Barry Schwartz, President and Chief Investment Officer. In this podcast, we ignore all the noise and have conversations about the things that matter in today's markets. It's what we talk about with each other here in the office, and we want to share those conversations with you. Please stay tuned for our legal disclaimer at the end of the episode.
Welcome back to the podcast. Today is May the 7th. Wow. Time flies. We are so excited that you could join us today. We got a great show.
New Berkshire Hathaway General Meeting this year led by Greg Abel. I think Warren Buffett was in the audience, even asked a question.

**Ernest** (0:47)
It was a deep fake.

**Barry Schwartz** (0:48)
It was a deep fake. Okay. So we want to talk about, for sure, that annual general meeting. Ernest paid attention to it. We also want to talk about two of our largest holdings, Google and Apple. Both stocks are at all-time highs or near all-time highs as the AI trade continues. So, and we also have some things to talk about in terms of AI and how to play it going forward, given that it's been a one-way trade for a very long time. So let's, before we get into that, let's get into this. If you like our podcast, of course, please subscribe to it on Apple, on Spotify and on YouTube. We really appreciate all your five-star reviews, as well as your comments. You can leave a four-star review too, but five-stars are a lot better. If you have any interest in Baskin Wealth Management, we would love to talk to you about your portfolio. One of the things that separates Baskin Wealth Management from our competitors in the bank and brokerage world is there's only one layer of fees. Many of our competitors will charge you an advisor fee, as well as a fee to hold different products that they outsource. There's no outsourcing here. We do all our own research. We do all our own cooking. Ernest and I own all the stocks that the clients own, either individually or through a fund. We'd love to share our ideas with you. We're very excited about a lot of our investments in our portfolio. We feel a lot of them are growing quite quickly and quite undervalued, and we feel now is our time.
If you have any questions and you want to talk to us more, we'd love to speak to you about your portfolio. So Ernest, I mentioned at the top, the AI trade.
It seems that the earnings from the S&P 500 have been unbelievable, but a lot of that has been driven by just a boom in AI, whether it's memory stocks or chip stocks. All of a sudden, these earnings are growing fantastically, so that's what's partly lifting the S&P 500 The other thing that's happening is adjacent companies, companies that are helping to provide data center equipment, building data centers, earth moving equipment, fiber optics, you name it, those companies are also participating. Just so happens that the S&P 500 has some of those greatest companies in the world.
The things that what makes us concerned, of course, is some of those businesses. First of all, you're investing in the second derivative, so you really have to hope this AI trade continues to go as long as you want, as long, I mean, a very, very long time at a high rate.
Also, if things peak, you're paying a high multiple right now for industrial companies that could be quite cyclical and could suffer problems in other areas of their business. So, no question, we're huge believers in AI. We have a number of magnificent seven companies, as well as other companies that we believe will benefit from AI, but we're certainly never going to put the entirety of your portfolio into a one-way trade. And we've seen it before, even if the fundamentals of a industry continue to work or grow, there's no guarantee that the stock prices work. We've seen that, of course, with software companies right now. So, your take right now on this AI madness that we're seeing with the S&P 500

**Ernest** (3:59)
So, I think you have to really break it down rather than just put everything that is tech as AI winner or AI loser. So, if you look at the kind of the underlying performance of the various participants in the AI ecosystem, you have the, certainly, the picks and shovels today are the ones that are making, the share prices are going up the most. So, that would be memory suppliers like Micron and SanDisk. They would be fiber optic cable providers like Corning. They would be like CPU chip providers like Intel.