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Warren Buffett said he still wants to own the company, despite the group’s cash piles dumping stocks and rising to records after not making major acquisitions. We tried to reassure the shareholders of the company.
In a letter to shareholders released on Saturday to annual shareholders, the billionaire investor said “doesn’t prefer ownership of cash equivalent assets over ownership of good business.”
The 94-year-old’s decision to deal with a cash pile that reached $33.42 billion at the end of last year was because a record valuation reduced the appeal of US stocks and made it difficult for Buffett to unearth long-standing major deals. It was his trademark.
In his letter, Buffett states: “Berkshire shareholders can ensure that we will deploy a significant majority of their money into stocks forever. Many of these have important international businesses, but most of them are will expand American stocks.”
The letter was released along with Berkshire’s fourth quarter results. This showed a $9 billion increase in cash pile over the quarter as Buffett trimmed shares in the stock, including billions of dollars in Citigroup and Bank of America stocks.
The group’s cash mine has almost doubled over the past year. It puts stock sales, including hundreds of billions of dollars in Apple’s stock, into its financial notes.
Berkshire is a vast conglomerate with companies ranging from US insurance company GEICO to Railway BNSF, disposing of $143 billion in stake in 2024, far surpassing the $9 billion it invested in the stock.
The increased transition to US government debt in Berkshire has been a boon for the company since the Federal Reserve began lifting interest rates in 2022.
Last year, the company’s insurance subsidiaries reported interest income of $11.6 billion, primarily from holdings on Treasury invoices, comfortably surpassing the dividends they receive from their portfolio of stocks.
“As the Treasury bill has improved and significantly increased the holdings of these highly liquid short-term securities, we have supported a large predictable return on investment revenue,” Buffett told shareholders.
The conglomerate reported operating profit of $47.4 billion in 2024, up 27% from 2023, resulting in stronger performance from the insurance business.
The operating results rule out changes in the value of Berkshire’s $272 billion equity portfolio, and shake up a swing that Buffett has long dismissed as meaningless. Berkshire revealed it had earned $101 billion in stock sales last year.
Addressing the group’s cash pile, Buffett pointed to an increase in value for nearly 200 Berkshire operating subsidiaries, including the Berkshire dairy queen and the fruits of the loom underwear maker. A combination of companies and stocks.
The billionaire also warned shareholders of dangers to the country’s debt and currency value.
The warning comes when Donald Trump’s bond investors weighed in reducing federal spending on the threat of inflation from tariffs the US president promised to impose on American trading partners.
“If fiscal foolishness wins, the banknotes can be seen as their value evaporates,” he wrote. “In some countries, this reckless practice has become customary, and in our short history, the US is approaching the edge. Fixed coupon bonds provide no protection against runaway currencies.”
Berkshire has sold more shares than it bought for the ninth quarter in a row, but Buffett hopes the group will boost shares in the five Japanese trade groups that were first supported in 2019. He said there was.
He added that five companies, Mitsubishi Corporation, Mitsui & Co, Itochu Corp, Sumitomo Corp and Marubeni Corp, have agreed to exceed the previously agreed 10% threshold.
“Over time, we will see some increase in ownership of all five of Berkshires,” Buffett said, and future leaders of Berkshire “hold this Japanese position for decades It’s probably,” he added.
Buffett said the stakes that Berkshire paid $13.8 billion is now worth $23.5 billion.
Berkshire also confirmed that the company has not repaid its own shares since May. The company’s Class A stock has returned 109% over the past five years.
“In many cases, there’s nothing convincing. Very rarely, we kneel at the opportunity,” he said.
