Buffett Talks Earnings, Trade, Wells Fargo at Berkshire Meeting

(Bloomberg) -- Warren Buffett and his business partner, Charles Munger, answered questions from analysts, journalists and shareholders in the audience of Berkshire Hathaway Inc.’s annual meeting in Omaha, Nebraska. Here are highlights of what has happened so far:

• Buffett discussed earnings a bit, warning people that the new accounting rule produces some “unusual effects.” It actually led Berkshire to a net loss in the quarter, even though operating profit climbed.
• Both Munger and Buffett were optimistic about the trade situation across the globe. At times there will be tensions in a relationship like the one between China and the U.S., Buffett says. But the benefits of trade are “huge,” he says.
• Buffett thinks that deals will still come to Berkshire, even when his future successor (who hasn’t been publicly named) takes over. As for the deal flow right now, he says his phone hasn’t been ringing off the hook.
• Buffett doesn’t want his insurance companies to be the number one, two or three in exposure to cyber risk. It’s an area that could cause a "super-cat," a massive loss for the insurance industry, he says.
• He was also asked about why he was sticking with Wells Fargo after the scandal. He notes that they’ve made mistakes and they had the wrong incentives in place. He reiterated support for Tim Sloan, who he said was correcting mistakes made by other people, and says he doesn’t think the bank is in any way inferior to other ones. Munger said that lender will be better going forward, now that it’s worked to clean up these problems.

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