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Buffett says trust is key to Berkshire's success

Justin hats on display at the 2017 Berkshire Hathaway Annual Meeting in Omaha NE David A. Grogan | CNBC
Manuel Armenta | 08 May, 2017, 15:42

The so-called Woodstock of Capitalism has begun.

Berkshire Hathaway chairman and CEO Warren Buffett talks with a reporter before the Berkshire Hathaway annual meeting in Omaha, Nebraska, U.S. May 6, 2017.

Thousands more are likely to tune in via Yahoo Finance, which is livestreaming the festivities.

Buffett echoed Munger's comments: "I had plenty of opportunities to ask [Google] questions but I blew it".

Buffett, sitting next to Munger onstage, led with a characteristic quip.

Billionaire Warren Buffett says the Republican plan to repeal and replace Obamacare would be a boon for the super-rich.

Other business luminaries are also in attendance.

"They have followed the standard capitalist formula. of trying to do the same business with fewer people", Buffett said.

He was joined at the traditional newspaper tossing contest by friends including Microsoft Corp co-founder and Berkshire director Bill Gates, and Miami Dolphins defensive tackle Ndamukong Suh.

"As we sit here, somebody is doing something wrong at Berkshire", and the Wells Fargo situation highlights the "damage" that can result from inaction. It's the company's largest holding. "The main problem was they didn't act". "The CEO has to act", Buffett said. He criticized the company's incentive system which led to the creation of fake accounts, which he said encouraged "bad behavior".

Buffett also addressed the question of driverless vehicles, saying they could pose a threat to Berkshire-owned auto insurer Geico, and to BNSF if it spread to trucks.

Earlier this week, Buffett announced that Berkshire Hathaway had dumped about a third of its IBM stock.

The apparent "millennial" (Loomis' word) wanted to know what value Berkshire offers the companies in which it invests, and by extension the firm's own shareholders.

"I thought it would do much better", Buffett admitted on Saturday.

He said he was more comfortable buying shares of Apple Inc (AAPL.O), in which Berkshire has disclosed a 133 million share stake, worth close to $20 billion on Friday.

His other major holdings have also attracted a lot of attention recently. "We'd love to" buy more of them, he says.

Buffett also spoke about the failed Kraft Heinz bid for European consumer products giant Unilever. Apple gives the world iPhones, while 3G Capital improves operations, he argued, but what does Berkshire do?

"We want you to understand what you own", he said, and "there are just a million things that are of minor importance" at Berkshire, whose market value is about $411 billion US. But he also said it would be a "terrible mistake" if capital allocation were not the "main talent" of his successor.