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Berkshire Hathaway (BRK-B,, BRK-A) The CEO, Warren Buffett, defended the Tas of growing cash of his business, thought about errors, and again praised what he called the “American miracle” of American economic growth in the last two centuries While the conglomerate declared a record operating profit of $ 47.4 billion last year.
Writing in his 2024 annual letter The Berkshire shareholders published on Saturday, Buffett said that these record profits occurred despite more than half (53%) of the company’s operating activities reporting a drop in profits last year.
“In 2024, Berkshire did better than what I expected, although 53% of our 189 operating companies declared a drop in profits,” wrote Buffett. “We were helped by a significant gain foreseeable in placement income, because the yields of the treasury have improved and we have considerably increased our assets of these very liquid short -term titles.”
At the end of the year, the Berkshire cash battery and other species type titles, such as cash bills, amounted to $ 334.2 billion, almost double the 167.6 billion Dollars seen at the end of 2023. At the end of the year; At the end of 2023, these assets were estimated at $ 354 billion.
Major sales of Berkshire’s participation in Apple (Aapl) During the first, second and third quarters of 2024, the value of its assets in the technology giant would drop by around $ 100 billion.
The president of Berkshire Hathaway, Warren Buffett, attends the annual meeting of shareholders of Berkshire Hathaway Inc in Omaha, Nebraska, United States, May 3, 2024. Reuters / Scott Morgan ·Reuters / Reuters
“Despite what certain commentators currently consider as an extraordinary cash position in Berkshire, the vast majority of your money remain in actions,” Buffett wrote on Saturday. “This preference will not change.
“During our property marketable The shares dropped down last year from $ 354 billion to $ 272 billion, the value of our unskilled controlled shares has increased somewhat and remains far greater than the value of marketable wallet.
“Berkshire shareholders can be assured that we will forever deploy a substantial majority of their money in actions – mainly American actions, although many of them will have international operations.”
For the full year in 2024, Berkshire’s total income reached $ 371.4 billion, compared to $ 364.5 billion the previous year. His investment gains raised $ 41.6 billion, compared to $ 58.9 billion in 2023 and reflecting how these figures can, to use buffett words, “swing savagely and unpredictable” year. The operating profit of $ 47.4 billion from the company excludes the gains or losses of its investment portfolio.
The declared net profit of Berkshire, including his investment gains, collected $ 89 billion last year, against $ 96.2 billion in 2023.
At the top of the annual letter this year, Buffett began with reflections on the many errors made to Berkshire Hathaway over the years, but has kept his general comments on the advice of the late Tom Murphy: “Praise by his name, Criticism by category “.
“Sometimes I made mistakes in the evaluation of the future economy of a company that I bought for Berkshire – each a case of capital allowance went wrong. This occurs with the two judgments on marketable actions – we consider them as partial Business ownership – and 100% companies’ acquisitions.
“At other times, I made mistakes when evaluating the capacities or loyalty of managers that Berkshire hires. Loyalty disappointments can hurt beyond their financial impact, pain that can approach that of a failed marriage. “
“During the period 2019-23, I used the words” error “or” error “16 times in my letters,” added Buffett. “Many other large companies have never used any of the words on this period.”
Buffett added that, given his advanced age, he “will not be long” before Greg Abel took his place as CEO and wrote annual letters to Berkshire shareholders.
“Greg shares Berkshire Creed that a” report “is a CEO of Berkshire owes owners every year,” wrote Buffett. “And he also understands that if you are starting to deceive your shareholders, you will soon believe your own tag and you are also mistaken.”
In reference to the current investments of Berkshire, Buffett also noted some of the “decedement” which populate this portfolio.
“We have nothing that is a major brake,” wrote Buffett, “but we have a number that I shouldn’t have bought.”
Buffett, as he has done in recent years, has also boasted of Berkshire’s tax expenditure and praised the wind from an American economic tail which took advantage of him and his businesses, as an investor and operator.
In this year’s letter, Buffett noted that the $ 26.8 billion in taxes paid by Berkshire this year are most of the individuals ever paid to the United States government.
“To be precise, Berkshire last year made four payments at the IRS which totaled $ 26.8 billion. This represents about 5% of what all American companies have paid,” Buffett wrote.
“In a very Minor Way, Berkshire shareholders participated in the American miracle in the precedes of dividends, thus choosing to reinvest rather than consuming, “wrote Buffett.
“Originally, this reinvestment was tiny, almost meaningless, but over time, it has changed, reflecting the mixture of a sustained savings culture, combined with the magic of long -term composition.
“Berkshire’s activities now have an impact on all the corners of our country. And we have not finished … One day, your nieces and nephews in Berkshire hope to send you even more important payments than we have made In 2024. Spend it wisely. “
In addition to comments on Berkshire companies and other investment subjects, Buffett’s letter has become more closely monitored for changes in the company’s annual sprawling meeting, generally held on the first weekend in May.
This year’s edition, scheduled for May 3, will include “a somewhat modified schedule”, wrote Buffett on Saturday, with the famous question-answer session starting and ending earlier.
Buffett will be joined again by the vice -president of Berkshire, Greg Abel – the heir to Buffett – and Ajit Jain for two and a half hours from 8:00 am after a short break, only Abel will join Buffett on stage, with the session of Questions / answers ending at 1:00 p.m.
Over the past years, Buffett’s questions and answers with shareholders have extended around 3:00 p.m. local time; In 2020, the Q&R ran well overnight.
