Earnings

Buffett On Driverless Tech, Amazon and Wells Fargo

Over 30,000 Berkshire Hathaway shareholders met in Omaha, Neb., this past weekend to gain insight on a number of topics from chairman and CEO Warren Buffett.

The event kicked off to a disappointing start as the multinational conglomerate reported a miss for the first quarter of 2017. Profits fell 27 percent to $4.06 billion, or $2,469 per share, down from Reuters’ forecast of $4.37 billion, or $2,655 eps. The loss has been attributed to a high volume of claims paid out in Australia in the month of March following a damaging cyclone, said The Financial Times.

But the real news was Buffett’s commentary. He reportedly spoke out against the Republican health care bill and addressed his concerns for the logistics and insurance industries as tech companies and automakers develop self-driving tech.

“If driverless cars became pervasive, it would only be because they were safer and that would mean that the overall economic cost of auto-related losses had gone down and that would drive down the premium income of Geico,” Buffett was quoted as saying by NPR. “Autonomous vehicles widespread would hurt us.”

On the subject of health care, Buffett referred to rising costs as a “tapeworm.”

“If you talk to world competitiveness of American industry, [healthcare costs are] the biggest variable where we keep getting more and more out of whack with the rest of the world,” he was quoted as saying by the FT.

Buffett also reportedly shared his insight on the fraudulent account scandal at Wells Fargo.

“There were three very significant mistakes,” he was quoted as saying. “But there was one that dwarfed all the others. The biggest mistake was, at some point if there’s a major problem, the CEO will get wind of it. And that moment that’s the key to it. The CEO has to act.”

On the subject of missed business opportunities, Buffett spoke to his hesitance to invest in online retail and cloud computing giant Amazon, reportedly saying the company’s shares “always looked expensive and I didn’t think he would be where he is today. I was too dumb to realize what would happen,” he said. “I have admired Jeff for a long, long time but I did not think he could succeed on the scale that he has. I’ve underestimated him.”

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