Stock returns have been dominated by mega-cap technology and artificial intelligence-related stocks. AI has the opportunity to increase productivity across the economy, but even a revolutionary innovation that changes the world can be overdone.

Debt ceiling negotiations stalled, interrupting stock gains. Both sides know time is short, as funds run low. Investors should prepare for more market volatility.

Warren Buffett’s $325B concentrated investment portfolio contains 48 companies. 4 holdings were eliminated, 8 decreased, 7 increased, and Berkshire made 2 new purchases.

Some banks are perceived to be weakened and at elevated risk of failure, with Pacific Western Bank currently in the crosshairs. While the better news on inflation was positive, the FDIC assessment and the contentious debt ceiling negotiations added to the gloom.

At the annual meeting, Warren Buffett said most of Berkshire Hathaway’s businesses should have down 2023 earnings, but the insurance should drive overall operating profit growth. Berkshire reduced its stock investments, including a significant oil holding, but continued to buy back its own shares.

Berkshire Hathaway’s annual “Woodstock for Capitalists” was held on Saturday. Warren Buffett, CEO and Chairman, and Charlie Munger, Vice Chairman, answered questions from a packed house for over five hours. Buffett expects most of Berkshire’s businesses to report lower earnings this year.