Top Insights from Warren Buffett’s Latest Letter to Berkshire Hathaway Shareholders
Discover Warren Buffett’s strategic approach on equity investments, his growing confidence in Japanese conglomerates, and the leadership values set for Berkshire Hathaway’s future.
Colin is an Associate Editor specializing in technology and financial news. With over three years of expertise in editing, fact-checking, and proofreading financial and political content, he holds an M.A. in journalism from The New School and a B.A. in history and political science from McGill University.
Essential Highlights
- Warren Buffett reassures shareholders that despite Berkshire Hathaway’s record cash reserves and recent stock sales, the majority of their investments remain firmly in equities.
- Buffett commends the leadership of five Japanese conglomerates in which Berkshire has invested since 2019 and indicates plans to expand these holdings.
- He expresses strong confidence in Greg Abel, his successor, to maintain the tradition of transparent and honest shareholder communications.
Warren Buffett’s eagerly awaited annual letter to Berkshire Hathaway shareholders was released alongside impressive fourth-quarter financial results.
Here are the key takeaways from his letter.
Berkshire’s Commitment to Equities Despite Stock Sales
At year-end, Berkshire Hathaway held $334.2 billion in cash, cash equivalents, and short-term U.S. Treasury securities—more than double the $163.3 billion held at the close of 2023.
Buffett reassured investors that, despite this large cash reserve, “the great majority” of Berkshire’s investments remain in equities rather than cash.
Although Berkshire sold more than $143 billion in stocks last year while purchasing $9.2 billion, Buffett emphasized that the value of Berkshire’s non-marketable securities—equity in privately owned companies—is significantly higher than its public market portfolio.
He underscored Berkshire’s philosophy of prioritizing business ownership over holding cash, noting that “paper money can lose value if fiscal irresponsibility prevails, but businesses and talented individuals generally adapt to monetary challenges.”
While Buffett noted that investment opportunities aligned with Berkshire’s criteria—buying quality businesses at fair prices—were scarce last year, the company did acquire new positions in Constellation Brands and increased stakes in Domino’s Pizza, Occidental Petroleum, and Pool Corporation during the final quarter.
Long-Term Vision for Japanese Investments
Though most investments are U.S.-based, Berkshire expanded its holdings in five Japanese conglomerates—ITOCHU, Marubeni, Mitsubishi, Mitsui, and Sumitomo—that share similarities with Berkshire’s diversified model.
Buffett praised their prudent capital management and balanced executive compensation, affirming Berkshire’s commitment to these companies for the long haul and signaling plans to increase investments further.
Since initiating these investments in mid-2019 with $13.8 billion, their value has grown to $23.5 billion by year-end.
Embracing Mistakes and Celebrating Wins
Buffett reflected on Berkshire’s origins, admitting the initial purchase of the textile company was a mistake, as highlighted by his partner Charlie Munger.
The letter emphasized how a single successful decision can outweigh numerous errors over time, citing Buffett and Munger’s partnership and long-term holdings like Coca-Cola and American Express as prime examples.
Insurance was a standout performer in 2024, with GEICO’s underwriting earnings soaring to $7.8 billion, up from $3.6 billion the previous year, effectively offsetting challenges faced by other subsidiaries.
Buffett acknowledged that half of Berkshire’s 189 subsidiaries saw earnings declines, ranging from exceptional performers to some disappointing businesses.
He highlighted the importance of transparency about mistakes—a tradition he trusts Greg Abel will continue, stating Abel understands the dangers of deceiving shareholders and oneself.
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