Hello, YieldAlley readers! In this issue:

📱 Everything Apple said about tariffs (Sherwood)

🚗 Our Biggest Health Fear as We Age: Bad, Rude and Ignorant Drivers (WSJ)

🏞️ Who owns London’s (privately owned) public spaces? (CNBC)

📚 A Comprehensive Guide to ETFs (CFA)

💰 Why own bonds? (Wells Fargo)

In a historic moment at the 60th anniversary Berkshire Hathaway annual meeting in Omaha, 94-year-old Warren Buffett announced he plans to ask the board to make Greg Abel the company's CEO by year-end. Abel, 62, who currently serves as Berkshire's vice chairman of non-insurance operations and has been widely viewed as Buffett's successor since Charlie Munger revealed the succession plan in 2021, was at Buffett's side when the announcement was made. The unexpected news, delivered at the meeting's conclusion, prompted a standing ovation from shareholders as Abel reportedly remained unaware the announcement was coming until that moment.

Buffett will make his recommendation at Sunday's board meeting, with formal approval expected "in a few months." While Buffett intends to "still hang around and conceivably be useful in a few cases," final decisions on operations and capital deployment will rest with Abel. "The decision to approve Abel moving into the Berkshire CEO post will take place over the next two board meetings," Buffett explained, adding that other than his two children, board members, including Abel, hadn't been informed before Saturday's announcement.

The company reported that operating earnings fell 14% to $9.64 billion in the first quarter, driven by declines in insurance underwriting and foreign exchange losses. Berkshire's cash reserves reached a new record of $347 billion, as Buffett was a net seller of stocks for the tenth consecutive quarter. The company's shares hit all-time highs, climbing nearly 19% this year and significantly outperforming the S&P 500.

Buffett criticized tariffs and trade protectionism without directly naming President Trump, declaring that "trade should not be a weapon" and that "In the United States, we should be looking to trade with the rest of the world. We should do what we do best, and they should do what they do best." He described the U.S. budget deficit as "unsustainable," adding, "We don't know whether that means two years or 20 years, because there's never been a country like the United States, but this is something that can't go on forever."

Despite these concerns, Buffett expressed his enduring faith in America, noting that "the luckiest day in my life is the day I was born [because] I was born in the United States." He described capitalism in the U.S. as "a combination of this magnificent cathedral, which has produced an economy like nothing the world's ever seen, and then it's got this massive casino attached."

Regarding recent market volatility, Buffett remained calm, stating that "what has happened in the last 30, 45 days... is really nothing" compared to his experience of seeing Berkshire's stock cut in half three times during his 60-year tenure. "This has not been a dramatic bear market or anything of the sort," he observed.

Buffett revealed that Berkshire "almost spent $10 billion, not that long ago" and affirmed the company would "spend $100 billion" if the right opportunity presented itself. He indicated that deploying Berkshire's considerable cash reserves was "very unlikely to happen tomorrow" but "not unlikely to happen in five years."

On international investments, Buffett strongly committed to Berkshire's Japanese trading companies, stating "In the next 50 years... we won't give a thought to selling those" shares, even if the Bank of Japan raises interest rates. "The Japan investment has just been right up our alley," he added.

Buffett also expressed gratitude to Apple CEO Tim Cook, joking that "Tim Cook has made Berkshire a lot more money than I've ever made Berkshire Hathaway." He praised the late Steve Jobs for choosing Cook as his successor, noting that "nobody but Steve could have created Apple, but nobody but Tim could have developed it like it has."

Ajit Jain, Berkshire's chairman of insurance operations, highlighted significant improvements at Geico under CEO Todd Combs, who has reduced the workforce from approximately 50,000 to around 20,000 employees, resulting in roughly $2 billion in annual cost savings. Jain also noted Geico's advancements in telematics, which "used to be a source of competitive disadvantage" but is now "as good as anyone else's."

Regarding artificial intelligence, Jain acknowledged AI could be a "real game changer" for insurance but emphasized Berkshire's cautious approach: "We are not very good in terms of being the fastest or the first mover. Our approach is more to wait and see until the opportunity crystallizes."

Greg Abel, the CEO-in-waiting, addressed questions about his capital allocation philosophy, emphasizing continuity with Buffett's approach. "We have values that we as a management team — as defined by Warren and Charlie and everybody associated with the business — they had great values that really set Berkshire up well for the future," Abel said. He identified maintaining Berkshire's reputation as "absolutely critical" and highlighted the importance of keeping the company's balance sheet strong.

Despite stepping down as CEO, Buffett declared emphatically: "I have no intention, zero, of selling one share of Berkshire Hathaway. It will get given away gradually." He added that this decision was economic, explaining, "I think the prospects of Berkshire will be better under Greg's management than mine."

This announcement marks the conclusion of Buffett's remarkable 60-year leadership of Berkshire Hathaway. Since taking control in May 1965, he has transformed what would have been a "long dead" textile manufacturer into one of the world's most respected conglomerates.

As Ron Olson, a departing Berkshire board member, commented after the meeting: "Greg is ready. I have no doubt about that. We've known it for a long time." Olson added that Buffett has "lived a life full of surprises. Very few of his decisions have been anything but sensational."

With this transition, Buffett ensures an orderly succession while expressing full confidence in Abel's leadership capabilities. The Berkshire that Abel inherits stands at a historic high point, with record cash reserves and share prices, poised to continue the legacy of its transformational leader.

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Costco members can now enjoy significant savings on Uber services with the return of a popular gift card deal, available for a limited time both online and in-store.

This limited-time promotion presents exceptional value for anyone who regularly uses Uber's rideshare or Uber Eats delivery services. The 25% discount effectively gives you free rides or meals compared to paying full price. Executive members benefit even more with an additional 2% rewards earnings on their purchase.

Costco's customer-friendly price adjustment policy allows members who purchased these gift cards at the regular $79.99 price within the past 30 days to claim a refund for the difference through their online claim system. While online purchases have enforced limits through the ordering system, in-store shoppers can technically make multiple separate transactions, though this approach may not be appreciated by all store locations. Note that gift card purchases cannot be processed through self-checkout lanes, requiring assistance from a cashier.