The Canadian Investor - Berkshire’s $400B Cash Pile + How to Buy Private AI Companies

Episode Date: May 11, 2026

In this episode of The Canadian Investor Podcast, Simon and Dan break down Greg Abel’s first Berkshire Hathaway annual meeting as CEO and what it says about the future of the company after Warren Buffett. They discuss Berkshire’s nearly $400 billion cash pile, whether it is a sign of excessive caution or disciplined capital allocation, and why patience can look like a mistake when markets keep moving higher. They also look at Berkshire’s insurance business, BNSF Railway, energy exposure, AI-related power demand, stock buybacks, and why the conglomerate structure still matters. In the second half of the episode, Simon and Dan shift to private markets and the growing interest in companies like OpenAI, Anthropic, Stripe, Perplexity, and other pre-IPO businesses. They explain how platforms like EquityZen and Forge Global work, the risks of buying private company shares, and why access alone does not necessarily mean a good investment opportunity. They also discuss accredited investor rules in Canada and the U.S., whether those rules actually protect investors, and why wealth is a poor substitute for financial sophistication. Tickers of stocks discussed: BRK.B, AAPL, MSFT, NVDA, GOOG, UNH, IFC.TO, AP.UN.TO   Subscribe to our Our New Youtube Channel! Check out our portfolio by going to Jointci.com Our Website Our New Youtube Channel! Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Web player - The Canadian Real Estate Investor Asset Allocation ETFs | BMO Global Asset Management Sign up for Fiscal.ai for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

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Welcome back to the Canadian Investor Podcast. I'm back with Dan Kent. We have a really fun episode coming up. be talking a whole lot about the Berkshire Hathaway annual shareholder meeting. So Berkshire Hathaway is sitting on almost 400 billion in cash, the largest cash pile in history. And depending on how you look at it, that is either a sign that Berkshire has become too cautious or a sign that most investors have become too impatient. And you really see both sides of the argument looking on social media. That's really the tension from this year's Berkshire meeting. This was a the first annual meeting led by Greg Abel since becoming CEO, and I think a lot of investors were watching for one big thing. Does the Berkshire Hathaway Playbook change without Buffett fully at the helm?

And based on what we've heard, the answer seems to be no. Greg Abel clearly has a different style. Buffett was more big picture. Abel gets more into the weeds, operations, margins, efficiency, railroads, energy, AI, and how these subsidiaries can improve. But the core philosophy sounds very familiar. Be patient, stay liquid, do not chase deals, do not do something just because the market wants action, and when the right opportunity comes, be ready. And that might sound simple, but it is actually very hard to do in real time because when markets are moving higher, cash looks lazy.

discipline looks stubborn and patient can look like a mistake until that environment changes. Yeah, and I think that is the really important setup for the episode today because Berkshire is almost the complete opposite of where a lot of investors' attention is right now. So, I mean, we look to AI. A lot of people are asking, you know, how do I get access to open AI, anthropic, stripe, or other private companies before they go public? And I do get it. Some of the most exciting companies in the world are staying private longer. By the time they IPO, a lot of the value might have already gone to founders, employees, venture funds, you know, sovereign wealth funds, large institutions.

So retail investors kind of nationally wonder, you know, why can't I get in earlier? And, you know, the question is pretty fair. If more value creation is happening before the IPO, then, you know, public market investors are, are right to ask, you know, why they're showing up late to the part. And I think we're going to go over this after the Berkshire call, kind of how to get access to these funds or sorry, these opportunities, you know, before they go public. Exactly. But that's where investors need to be careful. Access is not the same thing as opportunity. Just because you can buy a private company does not mean you are getting a good deal. Private markets can come with high fees, poor liquidity, limited information, widespread, lockups and a lot of uncertainty around valuation. and that's very different from buying a public stock where you can see the financials,

compare the valuation, and sell if your thesis changes. So today, we're going to look at both sides of this. On one side, you have Berkshire sitting on a mountain of cash, refusing to swing at bad pitches, and on the other side, you have investors trying to get early access to the next great private company. And somewhere between those two extremes is a pretty much. important lesson for investors because the question is not just can I get access. The better question is, do I actually have an edge once I get access? Yeah, that's a key distinction because a lot of investors assume being earlier automatically means you have a better opportunity, but earlier can

also mean less information, less liquidity, worse terms, much harder time figuring out, you know, what the investment is actually worth. That doesn't mean private markets are always bad, but it does mean that, you know, investors kind of need to separate the excitement from the actual expected return because that is what we're trying to do here is earn, you know, returns on our money. And I think that becomes even more important when the companies involved are tied to AI, where the stories are kind of huge. The valuations are aggressive and the range of outcomes is is extremely wide. So a great company can be a poor investment if the price or, you know, the liquidity is, you know,

wrong, too high, whatever it may be. The other piece we'll get into is accredited investor rules if we have time to get to that because in Canada and the US a lot of these private market opportunities are only available to investors who meet certain income

or asset thresholds. The idea is investor protection. But the question is whether those rules actually protect investors or whether they mostly create a system where wealthier people get access to opportunities, that others do not. And that gets messy pretty fast because being wealthy does not automatically

mean someone understands risk and not meeting those threshold does not automatically mean someone is unsophisticated. It's a very blunt measure and way to measure something that is actually much more nuance, judgment, risk tolerance, financial literacy, and position sizing. Yeah, and I think that's the part, you know, where the debate is. I mean, people can gamble on sports, penny stocks, buy crypto, buy options or, you know, take massive risks in all kinds of public markets. But if they want to invest in in certain private companies, suddenly the rules say, you know, unless you meet a wealth threshold, you can't participate. So is it investor protection or is it just a very blunt filter? We'll kind to go over that again, as I mentioned later on, like past the Berkshire. But first, we're going to

start with Berkshire because I think, you know, the meeting gave investors a really useful contrast. You know, Berkshire is not trying to be exciting. It's not trying to win every trend. It's not trying to prove it can find the next hot AI company. It's trying to protect capital allocated patiently and kind of be ready when the odds are actually attractive. And in a market where everyone wants to access the next big thing, that might be the most valuable lesson of all because the danger is not missing every exciting opportunity. The danger is convincing yourself that every exciting opportunity is actually investable. So in today's episode, we'll break down Greg Abel's first Berkshire meeting as CEO, the cash pile, the buybacks, the insurance, BNSF Railway, Energy, AI, and what Berkshire's approach says about long-term investing,

we'll also talk about whether the cash pile is a drag, or whether it becomes a major advantage if markets finally give Berkshire the kind of opportunity it's been waiting for for years now. Then we'll shift to private markets, how platforms like equity zen and forge work, how investors can get exposure to pre-IPO companies, what the risks are, and why accredited investor rules deserve a closer look.

Yeah, and the big question running through the whole episode is pretty simple. So you have a market obsessed with access, speed, next big thing, and we'll kind of go over whether, you know, if the real edge is actually patience. There is an old saying in investing. It's not about timing the market, but time in the market. The most successful investors aren't usually the ones trying to catch every top and bottom. They're the ones who spend the most time in the market. I've been a quest trade user for over five years, and the reason I stick with them is that they remove the friction of regular investing.

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So let's get into it. I guess you'll start off with Berkshire. Yeah, let's do it. So this was one annual meeting that I was really looking forward to, but let's be honest, every year I look forward to it because it's always some nuggets of Warren Buffett that are really useful as investors. But I am a shareholder, so I felt an extra obligation to listen to the, you own it as well. And it was definitely Greg Abel's first meeting as CEO. He became CEO earlier this year. And it felt like the Berkshire under Abel hasn't really changed all that much, aside from different styles than Warren Buffett like we alluded to in the introduction. And it's not necessarily a bad thing. Buffett as was more a big picture communicator. He could explain the core economics of a business, capital allocation,

incentive, and risk in a really simple way that was very easy to understand for pretty much everyone without getting too deep into the operational detail. Abel contrast that a little bit seems much more comfortable going into the weeds, margins, operating efficiency, technology, subsidiary level execution, and where specific business can improve. So let's get started on the cash pile because that always makes deadline, at least since the cash pile has been growing significantly over the last few years. So their cash pile is almost at $400 billion, although he did make a point that it's probably closer to $3.80 if you remove a few things, but it's still a significant cash pile here. It's almost 32% of their total asset. And that's a ratio I like to look at because with inflation and

asset valuation just growing over time, an absolute number is not necessarily reflective of how big it is compared to everything else. So that 32% metric was really interesting. It's actually the highest level since 2005. It's a strategic advantage for them giving the current geopolitical environment when you think about tariffs, war, macro, all of of that. They are not changing their core strategy and having that liquidity does offer a lot of flexibility when those opportunities arise. They operate their business for the long run. The current situation, the Middle East does not raise input cause, but it's something they are working with their customers to manage. And that is the one thing about the cash pile. They did tie it a little

bit here to flexibility, but also what's going on in the world. They talked about how your fuel prices and it started to have an impact on consumer demand. They said that some of the large retailer that they deal with said that consumers are starting to have to make hard choices on what they spend because of those higher energy prices. But on the positive side of things, it's been a big tailwind for their railway intermodal business. And for those not fully familiar, not sure what intermodal business, just think of it, these like big containers you'll see on trucks and trains. Yeah,

C can't, exactly. And obviously C. So it's just kind of moving those between the different, yeah, you keep the containers and you move them from the different form of transportation. And that is making it more competitive

for railways because they actually don't get affected by higher fuel costs as much as trucking, for example. If you think about it for a second, I mean, a railway, way, yes, higher fuel costs will affect them. It'll be more expensive, but it's much more efficient than a trucking company. And although some may be advocating for their portfolio of companies to be

broken up and they did address that, they would trade at a higher multiple. ABLE remains confident that the conglomerate approach is the best approach. It provides them with capital flexibility, permanent ownership, tax efficiency, liquidity, and the ability to move capital across businesses as they see fit without public market pressure. So that was the overview they gave on the cash pile, geopolitical risk, tariffs, and the rising energy costs. Yeah, so I guess on the cash file, I mean, I haven't had a chance to actually look back at what Berkshire did from like 05 till like after the fallout of the financial crisis. So I would imagine that. cash pile back in 05 would have looked very bad for what three years until you know the bottom

fell out of the markets i don't know if it outperformed over that period but i think like overall the cash pile is not as big of a drag as it as it once was obviously you still don't want to hold a ton of cash you know if there's opportunities out there but i mean you can still get i mean what can you get on a five-year treasury right now probably four percent yeah or if 10 year is pushing four and a half i think the last time i check or four point three 34.4. Whether they have that or treasury bills, treasury bills, you're still going to get three and a half, 375. So you're still getting a decent return on those. Yeah, whereas, you know, if you come post financial crisis leading up to when, you know, the pandemic, you were probably getting less than

half of that, I want to say, maybe a little bit more than that. But it's not as big of a drag, but obviously when the markets are ripping away it as it doesn't really look that good. But I mean, on the flip side, like you only need one. big correction or crash, you know, the market sink 20, 25, 30 percent. Not only does that cash position earning 45 percent look better, but you can now deploy that money. You've been earning four to five percent on at, you know, better prices. And I think, you know, Buffett was kind of a big advocate for, you know, waiting for your pitch and kind of only swinging at the best ones. And I think for, you know, a lot of people who are, you know, angry, they aren't deploying a ton of

capital, it would kind of be a fundamental shift in their strategy to do so. I'd kind of be more worried if they did. Like if Abel took over and they started dumping a whole bunch, like if Buffett thinks of markets have been overvalued for three years or so here and then Abel takes over and they're, and they're, you know, spending a ton of money. I mean, that would kind of worry me more than, you know, the, the mentality they're taking right now. And I think like too many people are just kind of thinking over the next year, few years or whatever. I mean, even management. teams do this, but I think Berkshire's always been a management team that thinks in like literal decades. Like they don't care what the markets return over the next year, two year, three

year. They don't mind underperforming over that time frame because they know there's going to be an opportunity eventually, even though like it doesn't seem like there's going to be because all the markets have done has gone up. I mean, despite a short duration. They go up until they don't. So exactly. Yeah, I think it's people look at things right now and things can change quickly. And And they actually, an important point to make is their equity portfolio stock buybacks. So clearly they're reluctant to buy right now. They sold more stock than they bought in Q1 with sales totaling around $8.1 billion. Berkshire repurchase around $235 million worth of its own stock, which was the first time they

bought back stock since I think it was Q2 of 2024, if I remember correctly. Abel said that he bought back $15 million or he bought $15 million worth of stock. and bought back shares, well, or bought shares on the market. It's, it's for himself. So it's not buying back. But it just goes to show that he wants his incentives to be aligned with shareholders. So he's actually using his own money to go on the market and buy the shares. So I thought that was an interesting tip bit of information on the insurance business.

So clearly the insurance is a big part of the business here. And just a quick note here, we were both shareholders. but I actually added after the meeting to shares of purchase. I didn't add. It's like it's one of my larger positions. So I haven't bought it in quite a while. But I might have it continues to dip. Yeah, it's starting to be a decent position for me.

Not super large, but I really liked what I heard overall in this meeting. And we'll continue here. But yeah, I'm very confident Greg Abel and the current leadership there. They have some really solid people leading the different businesses. So I just thought it was a good way to add. And clearly they probably also think the stock is relatively cheap and they started buying back shares. And it doesn't look very expensive compared to a lot of the stuff you're seeing out there.

Yeah. The entrance. Yeah, go ahead. Well, here, I'll go like on the buybacks for like, Mercher. They authorized buybacks at like a certain book value typically. So I think for a long time it was 1.2x book. and now I think they go 1.4.

So it does make sense. I think for a while to Buffett said it was also kind of at his discretion. Yeah. He kind of changed a little bit. Yeah. Yeah. So for those wondering why they would assign this book value, it would just kind of be the value that they believe is the intrinsic value of all the underlying businesses. So a lot of people might think like why would that not be under book value?

And the main reasons for this is some of the acquisitions they made decades ago. are still on the balance sheet for purchase price, despite generating like massive. I can think of GEICO as one. Like it's a massive part of the business now. So they like to purchase shares at a discount to intrinsic value. So if they're looking at 1.4 X, they probably mean, you know, or they probably think that the value of all the underlying conglomerate like the entire businesses is, you know, probably more than that, anywhere from 1.5 and above.

And for a lot of people will ask, well, why wouldn't the market just act? value Berkshire at this, and it's just because they just, these types of companies always trade at a discount. Like, there's not a lot of analysts who are going to be able to analyze the entire underlying portfolio of company. So you kind of have to lean towards the fact that Berkshire knows what they're doing here. They know the company's best. So in that way, you know, it's hard to analyze fully, but that's kind of the value. I kind of get the impression they think, you know, anywhere from one and a half to 1.8x book value is what they believe the company is worth. And that's kind of why they've started buying back. But it's very tiny. What do you say was 230 million? Like that's a drop in the

bucket. Yeah, 235 million. Yeah. So it's very small. But I think it's a good, it's a good indicator that they restarted doing it. And they spoke about the insurance business. So you touch on Geico a little bit. It looked good in Q1 with a combined ratio in the high 80s. The combined ratio compares the losses and expenses of the insurer to the premiums collected. A combined ratio of 95% means that for every $100, in premiums collected, they see a $5 profit. So the lower, the better, but it's key to remember that these can fluctuate. And Abel did say that even though Q1 was good, it benefited from a benign catastrophe environment. So clearly, if there's more, for example, natural disasters, then it's not going to look as good.

in any given quarter a quarter. In other words, it's good, but the external environment was definitely favorable for them. Geico performed well on a profitability basis, but growth of 2% in enforced policies, which was much lower than they spoke about in industry peers who leads in that category, which is progressive, and I think progressive is right around 10, 11%. The key for Geico for them is really to prize the risk appropriate. retain customers and to ensure that policies grow. It's a balancing ad they have to achieve between all three because if you just focus on the

growth in policy, then you'll probably have to, you're probably not pricing the risk appropriately just to focus on that growth. So I thought it was really interesting. Again, insurance is not my forte, but I'm starting to know a bit more. Maybe not enough to be in dangerous just yet, but still a big part of the business. Yeah, it was kind of the same with intact, which would be, I mean, kind of similar model P&C insurance, like property and casualty. So they posted really good results, but it was also because of the catastrophe situation. Like you have lower catastrophe results in a quarter.

You're going to have a lower combined ratio. But like the market knows that this environment won't last. Like you're eventually going to hit a quarter where you're paying out a ton of money because of whatever. It may be like in the States, probably a ton of. to, you know, weather-related events up here, fires are always an issue. So there's always going to be ugly and good quarters. So the market really doesn't react. You know, there's a lot of people who wonder, like, you know, during a quarter when they got to pay out like $4 billion worth of catastrophe losses, like why the market doesn't hammer them for that. And they just kind of

know that, you know, these are going to level out over time. It's part of the business. Yeah. It's just part of the business model. Yeah. Yeah. So as long as you you price your policies accordingly and you don't take on too much risk, usually you're able to absorb it. Yeah, and that's another thing why a lot of good insurance companies are struggling right now, because you can easily, like, these insurance companies could grow however much they wanted to if they got a little bit more lenient on the underwriting, but you'll eventually pay for that. Like if they could easily grow 11%, but if they're taking on policies that are not going to be profitable, that'll, like, that'll hammer you down the line eventually.

Yeah. So the next big part of the business that they talked quite a bit about is BNSF Railway. So the main takeaway here is that Abel focus on the fact that Berkshire owned, the Berkshire owned Railway can do better operationally. In the past, we might have seen Buffett put more emphasis on its mode, what a great business it is, but Abel really focus on making this asset better. The strongest part of the business, like I mentioned earlier, is the intermodal part. and it's really benefiting from higher energy prices and making it even more competitive compared to trucking.

The benefit is simply because, like I mentioned, it's more efficient at moving freight in terms of the required energy. So an increase in energy just doesn't have the same kind of impact it does on trucking. So definitely a part that was interesting, there's some tailwinds there, but then again, I think really they wanted to say they can do better in terms of being more efficient. I think they're five out of six in terms of the Class 1 railways. If I don't have that in my notes, but something like that, they're slowly improving, but they can do better compared to peers. Yeah, it's one of the worst run class 1 railways. That's not to say it's badly run, but the other ones are generally more efficient.

It hasn't done very good. Not bad, but just not as good as others. Yeah. And then really interesting part here on energy, data centers, and AI. So yes, they got asked these questions. They addressed it during the meeting. Berkshire is using AI for specific operational uses where they see value. AI must be additive to the business and data provided must be consistent and accurate.

Humans use the data to make important decisions but still make the important decisions. And for them, it's a tool that they use. They're not using AI just for the sake of using AI. They're using it when it makes sense and provide tangible improvements. improvements. So they're not using it like the Maple Leafs did at the trade deadline for trade ideas. No, I just digress here. It was just too easy to chime that in. Sorry Maple Leafs fan, but you got the first overall draft. Abel even called them large logic models, meaning that they use them to solve logical challenges within the business. They are seeing AI-related demand account for a bigger

percentage of their energy business, and they see that demand growing materially over the next five years. they said data center and hyper-scaler customers must bear the full cost of the infrastructure they require. And I really liked hearing that. That was really something I liked hearing as a shareholder but also a human. Yeah. Berkshire does not want its existing customer to subsidize grid upgrades for AI data center. So another way, in other terms is, okay, you want to use our energy, that's fine, but you're going to make sure that you pay for these grid upgrades that will be required for us to send it.

So it will, it should minimize the impact on existing customers. And I'm sure they can grow their power output as well if needed. But I really liked hearing that. And one thing he mentioned I thought was interesting is that 15% of natural gas consumed in the U.S. is touched by their pipeline network. Yeah, I didn't know this. Yeah. Yeah.

So he did, uh, he mentioned. mentioned that word for word in the shareholder meeting. Yeah, I didn't know they had that large of exposure. I would imagine on the like the grid infrastructure like I would imagine that becomes regulation. Like there's no way they're going to make all the consumers front the costs for these big Well, not necessarily the consumers, but you could see utilities and essentially hide the prices to make up for those upgrades.

Yeah, that's what I mean. Yeah, I think that's, I think that's a big risk. I've heard, I've read a lot on that subject and a lot of people are concerned about that. Yeah. These data centers are almost willing to pay like any price, not any price, but they're very, they're less price sensitive than consumers. So if they need energy, they'll get it even if it means paying a higher price than, you know, residential customer.

And then you really create a risk where residential and regular commercial customers really get affected negatively. They still pay a similar price to those hyperscalor data centers, but they don't have the same kind of flexibility to absorb those higher prices. Yeah, exactly, which I kind of think, which is why they're going to have to, you know,

put in some sort of regulatory framework where if you're a company that's utilizing it for that, you're going to have to front. I mean, Berkshire, I think, is just kind of getting ahead of the curve here. Yeah, because I think it's going to be like, you know, to take side track a little bit here, but I think this is something governments will have to be

very careful about. Yeah. Because energy is essential. And if you get to a point that people are getting squeezed because of those data centers, like people will get pretty angry and whether it's a populist revolution or whatever it is, if people really are feeling that they're behind because these data centers are being built in their backyard and using and making their energy cost, double, triple, whatever it is, it can create, it can become a very existential question for societies.

Yep, definitely. That's kind of all I had on the energy side. I think there's going to be something put in place to make sure that doesn't happen, or at least there should be. No, exactly. And Buffett actually did an interview, and he actually talked in the meeting as well. So at the beginning, he gave the mic to Buffett, who was not at the front. He was just sitting with, I guess, the board members.

I think Tim Cook was also there. Yeah, I think he's kids and stuff. Yeah. Yeah, exactly. So you had like a lot of people sitting at the front with him. But he also did an interview. So I'll sum up what you did an interview with Becky Quicks. So I'll sum up a little bit of what Buffett said.

He talked about the $35 billion investment in Apple that they did about 10 years ago, which turned into a whopping $185 billion. So not a bad investment. And he did so in kind of talking about the anniversary of, you know, Tim Cook leaving as well. So all of that together. So it gave a big nod to Tim Cook and how well he had done for shareholders and for the business since taking over after Steve Job passed away. I really didn't realize that they had put $35 billion and it was essentially 10% of, I think, their investments. That's something that he said. I'm assuming he's just talking about their investable assets here that they had put, so 10%.

That's obviously a massive stake and has been quite the investment for Berkshire Hathaway. And when he sat down with Becky Quick for the interview, he said that he believes that they have the right management and they pride in picking their spots when selecting investment opportunities. So a little bit like you mentioned in terms of just picking the right pitch, not swinging at every pitch, but picking the right, the fat pitch to try and hit those maybe double triples home runs. Sometimes they do nothing. Sometimes they are very active. It really depends. If they don't see any attractive opportunity, they're fine with not doing anything. So that would explain in big part of that 400 billion cash pile here.

Valuations are high and there are just some industries that. He doesn't understand and he does not want to take the time to understand them and that he just won't invest in them. Which is, I like it. I like the honesty. He was straightforward. He's like, I just, I'm not trying to learn certain industries. That's fine. I can respect that.

There's a lot of gambling happening in the markets right now. One example that he gave was the one-day options. He's like, yeah, that's just, that's not even speculating. he's like that is gambling. Yeah. So that is, I mean, it's hard to disagree with him there with prediction markets like we talked, penny stocks, you name it. The opportunities to gamble in the market is everywhere. You see it.

You don't have to look very far. And at a time, time will come where there will be great opportunities to buy. It's just these environments are hard to predict and tend to come out of the blue. So that is one thing you get, you can get these opportunities. but for example, and these are just my own words, but think about COVID when it started, think about the great financial crisis. Most people did not see those opportunities come. Some did. I'm not saying no one did, but some did, but most of those who did were also not right on the timing.

So you have to keep that in mind. And he's concerned by inflation, but not to the point where it was before Volker became FedShare back in the, I think late 1970s, early 19, 1980s when people were losing face in the US dollars. So those are the big points that I got from the interview. But it was nice to still see him there. Definitely I found, I don't know if it's, maybe I'd have to go back to this year. But he definitely looked a little bit, not frail, but you can tell that he's showing his age a bit more. But again, it might just be because I've watched like older videos of him also before that.

So seeing him like 15 years ago to now, maybe that's because my brand. saw those two in quick sequence. That made the difference. But I hope, I mean, obviously, I hope we keep Warren Buffett for years and years. But yeah, I mean, he's not a young, young guy anymore. I think he's, what, 94, 95? Mid 90s, yeah. Mid 90s, yeah. I mean, I've seen a lot worse 95-year-olds. Oh, no, for sure. He still kind of gets around. But yeah, just on the meeting overall, I think the issue is a lot of investors just cannot comprehend thinking as long term as Berkshire does. Like I think, you know, a lot of people are long term investors, but the reality of it is, the vast majority of investors are glued to their three-month P&L, their year-to-date returns, their one-year returns, whatever it may be, which is pretty easy. Like when you have a five, six, even seven-figure portfolio and you're just kind of clicking buttons.

but I mean, like these guys got to deploy hundreds of billions of dollars of shareholder money. So situation kind of changes in that regard. I mean, just in terms of the meeting, like I think the one thing you can take away from the entire meeting is the playbook is not changing. If you kind of thought that Buffett lost his touch and Abel was going to come in and just spend that cash pile, you're probably going to be disappointed. I mean, he did make, I think it was really quickly he bought Apple or sorry, not Apple Alphabet after he took over. I think it was a pretty small position, but they made two moves over the last year. I think they bought United Health and Alphabet, which are both up quite a bit, I'm pretty sure, from the bottom end of it.

But I mean, if you get to like my position with Berkshire, like my actual position in my portfolio, I mean, if we get to a market drawdown, I mean, it's not guaranteed, but it's it's very, very likely. You will see much lower volatility in a holding like Berkshire because it's what, it's 40% cash pretty much. Yeah. And then they can deploy it into equities at discounts. So I'm not too concerned with it. Like I said, I would be more concerned if they were spending a ton of money right now because I don't think it takes a genius to realize that the markets are much more expensive than this company is typically ever bought at. So yeah, it was it was a good meeting. The one thing I heard and I didn't actually look is the fact that it was like half empty. Like there was not a lot of people there relative to when Buffett did it. So. I wonder if that'll be a continuing trend or not. Maybe next year we can try to go. Yeah. Be a cheaper to get a hotel, hotel spa. Obviously, like Buffett is, I mean, he was oftentimes the attraction himself, right?

Like he's a legend. I'm not saying Greg Abel. Can I become a legend himself? I mean, he's Canadian. He's on the verge of getting his American citizenship as well. So they talked about that. But yeah, even if we get a kind of market correction too, I'm just looking. here at just in terms of the returns over the last five years. So you're looking at the NASDAQ around

looking at total returns around 112% over the last five years. The SNP 500 around 85 and then Berkshire had away around 60%. So it has underperformed. But the underperformance is very much like in the last couple months for the most part. Yeah. Yeah. So it's really like the NASDAQ has really gotten on a run-up, the SMP 5002. I mean, we've been on a bit of a historic run now for, yeah, month and a half or so, give or take a few weeks. So it's, I think it's tied to that. So if there's a market downturn, they also have businesses that are more like kind of

the traditional economy business, which I think should, should do better than stuff that's tech heavy if there's a pullback. But again, I could be wrong, but I'm very, very happy shareholder. and if it continues to trade at pretty interesting valuation, I will probably add to my stake. Yeah, I mean, when they think it's cheap, it's probably cheap because they don't, like, when they, when they do not buy back shares if they think it's expensive. They pull back all the time. So if they've started the buyback, they obviously think it's pretty cheap here. But yeah, that's all I have on the meeting.

Okay, no, but overall, I think really, I think good meeting to me. Greg Abel did very well. Different style, of course, than Warren Buffett. no one can replicate Warren Buffett. I mean, if you want to replicate them, you'll have to probably clone him and even then. So, no, very impressed. Like a shareholder, I have no concerns. Again, if you like Warren Buffett,

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helping you keep more of what you earn. Simplify your investing today at BMOetifs.com. Now we'll switch to the next topic here. How to get a stake in non-public AI company. So this is something I had heard a while back, but I had a friend of mine who asked me about it. So I thought it would be a pretty good podcast segment to do. So I'm sure you've heard of these small companies called OpenAI and Tromping, Stripe, or pick a private company that's worth hundreds of billions of dollars that is still private.

And it's not easy for retail investors to get stake in those companies before they go up public. And I'll go over some ways to get exposure. one way that I again I hadn't really looked into is those kind of there's like platforms two of them some examples here there's equities then and forge global are two platforms these platforms are like secondary market platforms for private company shares so they allow employees or early investors in those companies who want liquidity to sell their shares before the IPO now to be clear it's not a public market like a stock market and companies can often restrict transfers because they want to control their cap table. The cap table is when the company is private and they are

trying to get a valuation. So that's the cap table. If obviously there's prices being exchanged on these secondary markets, it could have a negative impact on those cap tables. So I'm sure the companies are very aware of it. It makes sense because you know, of course, the value of the shares trade on those secondary market and like the impact could be pretty significant, especially if they're raising billions of dollars. So is this legit? Yeah, it's legit. So Forge Global is actually owned by Charles Schwab and Equity Zen is owned by Morgan Stanley. I think there's other platforms, but those are the two big ones to my knowledge. And how it works, there's kind of three different ways. So based on what I could find on their side and

the research I did, a direct secondary, which just means that the. buyer transacts directly with the seller on this platform. Single fund offering. This is where you invest in a private fund, which only holds shares of a single private company. It's a one for one. And if when the company IPOs, then the shares are transferred to the unit holders of the funds.

A multiple fund company. A multiple company fund. This is where you invest in a fund that holds multiple private company in the event of one of the companies going IPO. the other companies remain in the fund, and the fund manager either distributes the shares of the company that just IPOed or sells them and then redistributes the proceed to the units of the fund. The fees are not cheap.

For secondary transaction where you buy shares directly from the sellers, you'll be paying at least 2% on the transaction up to 4% for Forge, while equity is at 2.5% for the funds, they don't say what the fees. are, but they state that they can be higher. So they're going to charge more for a management fee than a transaction fee for sure. Exactly. I mean, there's a reason why Charles Schwab and Morgan Stanley are in these businesses.

Because there's probably quite a bit of money to be made. Before I get going, any comments on that? No, I mean, well, I don't know if you go over it, but like if you buy this and then they go public, do you just get public shares? That's, yeah, that's my understanding. The only thing is I think you can also, if you do a direct transaction, right? So let's say you have an employee who wants to sell some of their shares, you buy it from the employee through this platform. There might be still some lockup periods that you'll have to deal with.

So I think those like transfer along with the deal. So, but yeah, I think you would get the equivalent of the public share. At least that's my understanding. Interesting. Yeah, that's the only question I had because I had, I have no idea how. any of this works. I didn't even know it existed before this episode. So I'm new to it as well. Yeah. And just to, uh, for a joint TCI subscribers here, you'll see. So I create an account on equities and I was kind of curious what it looked like. So yeah, I mean, you can get some pretty

well known companies. The one I'm looking at right now is perplexity. The minimum investment for a standard deal, which I think is a fund deal is $50,000. And then if you want to do a direct deal, maybe some of you can afford it. It's $4.5 million for a direct deal. Time to close is actually quite long. So for the fund, it's three to five months and the direct deal six to eight weeks. So it's not instantaneous either. It's not like you can access all companies.

You can put some interests in companies and then you'll see some of the stuff that's currently offer on equities. And right now some companies people might be familiar with that are available. And again, it does. it varies right over time. So you might see some more. Crackin, ripple if you're into crypto a little bit, Apptronic. Some of you may have heard of that.

Epic Games. I believe Epic Games. What is that popular game? Fortnite is it? No. Yeah. Is it Fortnite? No.

Yes, it is Fortnite. It is Fortnite. Okay. My memory is pretty good. So these are the kind of companies. Obviously, there might be some other offerings if you're looking at Forge Global. I just created an account on this one because I wanted to see what looked like, but just to give you a bit of an idea of what it is. Now, keep in mind that this is on top,

like these companies, there could be issues you face owning a private company. So there are issues like lack of liquidity, wide bid, spread ask, valuation uncertainty, lockup period. So these are all things you have to to keep in mind if this is something that interests you. And the caveat here is that you need to be an accredited investor. So that means in Canada, and I did some research, and it is a U.S. side, but it sounds like Canadian investors can also go on, and it seems like you should respect the accredited investor rules for your jurisdiction. So they're a bit different in Canada and the U.S., but in Canada would be at least

$1 million in financial assets, so not including real estate, $200K in annual income for yourself for 300k in annual household income, so you and your spouse, net assets of at least 5 million, which could include things like real estate. So there is a threshold that some of you may not be able to meet. And I signed up for equities and just to see, like I said, how it works. And honestly, they don't verify the accredited investor aside from just asking questions. But if you don't meet the requirements and you say that you do, there are some potential legal issue down the line, right? If there's a deal or something that happens and they ask to verify that you're an accredited investor, so it could create some issues for you. So I'm just saying

this because sure, they may not verify when you create an account, but doesn't mean that by certifying that you are, you could still get into issues down the line if you're not being truthful. So I just wanted to be transparent for this. And you get exposure to these pre-public companies. And in terms of other ways to get exposure. There's simply just not many, right? So you can go the public route where you buy a public company that has a stake into one of these well-known private companies. So think about OpenAI and Microsoft.

Microsoft has a 27% stake in it. The issue is that when you buy Microsoft, you also get the Microsoft business. So if you don't want that, well, tough luck, that's what you're buying, right? So you get indirect exposure. You can wait for IPOs like everyone else, or you can also buy companies that have commercial ties to those.

So kind of indirect exposure. Think of an Nvidia for exposure on OpenAI and Intropic because there are significant customers here. But again, you're also getting exposure to other kind of clients. So it's not perfect. So if you're looking to buy private companies that are smaller in scale, so these are probably more the big ones, the ones that people know. there's also sides that are more like crowdfunding private placement so i think that's the one you

were talking to me before so example of this are sites like front funder equesto go through you shouldn't need to be an accredited investor for most of those but some deals may require you to to be an accredited investor and they're definitely for front funders and all those those crowdfunding sites they're definitely smaller companies that need oftentimes upfront capital to grow for whatever reasons. So there's other ways to get exposure to private businesses. But again, you're talking about private businesses where there's less data than public businesses available to you, more risk associated with that. And of course, higher fees for the most part.

So these are all things you have to factor in. And then if you're thinking about equity zen or forged, then you're also thinking about like, meeting those threshold, right? So even if you're an accredited investor, I mean, 50K, if you just meet the, yeah, US, if you just meet the accredited investor requirements, I mean, that's a big investment, even if you meet those, right? Yeah, I mean, I guess the way to put it is it's very difficult. I mean, unless you have a lot of money, I guess, which is kind of the way a lot of this stuff works in the world. But yeah, I mean, my comments are more on the accredited investor thing, which you're going to get into here. So I'll chime in in that regard.

Yeah, I just, I think this is just a stupid, archaic thing that's in place. The rules are similar in the U.S. and Canada, like I mentioned earlier, 1 million financial asset, 200 to 300 K income, whether you're single or your household, 5 million net assets. It's one of the dumbest regulation investing. Now, I assume that they have that in place for good, like, good intentions. So I think the reason that they put these threshold is that first people can absorb losses more. That's probably the reasoning behind it that you are sophisticated enough to understand the risk and sophisticated enough to make those investments small enough that doesn't hurt you too much. But it's still really stupid because first of all, you could mean the accredited investor

and requirements and be living paycheck to paycheck. or have as much debt as you do in terms of financial asset. And doesn't mean you're sophisticated. I mean, I've talked to multimillionaires that had no idea what they were doing with investments. They would tell me about some of their investments. And my head, I'm like, well, you are going to go broke very soon, sir, or whoever I talk to. But, and the sophistication is just to make these investments small enough. I mean, I've also met people that were pretty wealthy that.

made really dumb large investments that took way too much risk. And it's not a good, it's just not a good look because it does create a perception that these investments are, you know, wealthy people can find more investments that could potentially make them even wealthier. And I think this is where it really gets dangerous, where you see retail investors that might not meet that and say, well, that's not fair. Like, you're essentially blocking me because I don't have enough financial asset from the upside of these kind of companies.

And don't get me wrong, there's a lot of risk involved as well. But at the end of the day, I think we've, when you talked about the, not game, I guess gamification a little bit, but also these prediction markets. To me, you're an adult, okay? Yeah. So people can gamble on sports, on sports. on crypto, on penny stocks, on prediction markets. And you think most people do like deep-dyed analysis on these kind of investments?

No. No. So even private markets, even if the argument is that, well, private markets are more opaque and they require more sophistication. I mean, a lot of people invest in stocks and barely do any due diligence. So to me, that doesn't really hold true. And if investor protection is the goal, then let adults participate. But maybe you can cap exposure, force clear disclosure, require basic knowledge certification,

crack down hard on fraud and misinterpretation. I think that would go a much longer way. And from what I've read, there seems to be some openness, at least from Ontario regulators, to try and modify these requirements. I think they're looking at that. I didn't do a deep dive because I didn't have. time on that part of it. But I just don't assume that someone is knowledgeable because they are wealthy. Sometimes it's the exact opposite. Yeah, the one rule that makes sense is, you know,

that you're wealthy enough to absorb the losses, but like the sophistication around understanding the risks, like, you could just make a lot of money. Yeah, but even then, right? It's not, it's about financial assets. It doesn't really, it doesn't ask you in the question of whether, and you're not, it doesn't matter. It's not net assets. It's assets. So people could be levered up to the wazoo and still meet the requirements and have zero room to absorb these losses.

Yeah. The rule doesn't make sense to me. Like they're opening up regulations to the point where you can, you know, the prediction markets is a prime example of that. They'll let a retail investor. blow $50,000 in a day if they wanted to on prediction markets, but you can't buy a private company without a five, you know, without $5 million in assets. It's like it doesn't make sense to have these rules in place. I think if you want to do this, you should be able to do it regardless

of what you're worth. Now, that said, most people will not be able to do it because we went over those minimums. Like most people don't have 60, you know, you probably need to, you know, you probably need to be an accredited investor by the thresholds to probably be able to actually buy these things, but that doesn't mean you shouldn't be allowed to. Like if somebody can take their entire, you know, if they had $60,000, they should be able to buy a private company just the same as they should be able to log on to any sort of gambling site and, you know, spend the money that way. It just doesn't make sense how they're so lenient in that regard, but when you're actually investing in these companies, they say, no, you have to be not necessarily

wealthy, but you need to have a lot of assets to do so. It's very weird. Yeah, I mean, if you go on Reddit, you can see the amount of stories where, well, remember in the pandemic where people on Wall Street beds, and I think you still have these stories where people would literally like Yolo 25, 50, 100,000, and that was their whole life savings on one-day option like Buffett mentioned in that interview with Becky Quick, which is essentially gambling. So you're telling me that it's, they can do that, but they can't put that 50 or 100K in a deal here on perplexity AI.

I mean, I think that's pretty risky too, but it's probably less risky than one-day options if I'm being truthful about it. So that's why it's, I do find these things, you know, pretty perplexing. I do hold that regulator. there's realized it that I think this needs to change. There are ways to put some rules in place that do help with better investor protection without using really wealth as a separator because I think people can probably realize I think there's more and more polarization in society.

There's, you know, the top, you know, 5, 10%, that has a whole lot more assets than the bottom 80, 90%, percent. And with rules like this, I think you just fuel the perception that regulators are just looking out for wealthy people. Yeah, I agree. I mean, if you want a good view of how you can do this on anything, just look up the allied properties Reddit, where the whoever it was took a quarter million dollars when allied property was like he pretty much, or him or whatever put their I remember. Yeah, they put their entire life savings into allied properties. I think it was close to $20 a unit. And now we're at like $9.50 a unit.

So you can do this, but you can't buy, you know, a share in a private company unless you got $5 million in assets. It's, it's a weird look. One that I would imagine changes, but I, like, there's so much, you know, stuff they need to regulate beforehand. I don't really know if this is a priority. I don't know. You know, I think you're probably right. But, yeah, I mean, maybe, maybe I'm just too, you know. free kind of market or let people, let adults make their own decisions and mistake and learn from

them. Maybe I don't know. Yeah. Maybe I'm sure you can let us know whether you agree or not, but anything else you want to add before we wrap this up? Nope, that's all I got. Okay. Well, I hope you enjoyed this episode. I think it was really fun to do, listen to Buffett, listen to Greg able, research this new platform. I wasn't really all that familiar with. Of course, there's more than just those two, you can look up the other platforms. And yeah, let us know what you also like about the kind of new format us using that little kind of intro to give you a little bit of preview of what we're going to talk about. So toying with that, we got that idea from Dan and Nick Hill from the Canadian real estate investor podcast. They've been doing that for a while

and testing it out. So let us know. I think it's fun to add that quick flow at the beginning and then we get back to after that more of our regular segment. So let's us know. If not, thank you so much for listening to the podcast. We will be back for a news and earnings episode on Thursday. The Canadian Investor Podcast should not be construed as investment or financial advice. The host and guests featured may own securities or assets discussed on this podcast. Always do your own due diligence or consult with a financial professional before making any financial or investment decisions.