Berkshire Hathaway Defends Cash Pile, Highlights Economic Growth
In his 2024 annual letter to shareholders, Berkshire Hathaway CEO Warren Buffett defended the conglomerate's growing cash reserves, acknowledged errors, and praised the "American miracle" of economic expansion.
Record Earnings Amidst Declines
Berkshire Hathaway reported record operating earnings of $47.4 billion in 2024. However, over half (53%) of its operating businesses experienced a decline in earnings. Buffett attributed the strong performance to gains in investment income from rising Treasury Bill yields.
Cash and Investment Portfolio
Berkshire Hathaway's cash and cash-like securities reached $334.2 billion at year-end, nearly double the previous year's $167.6 billion. Despite this, Buffett emphasized that the majority of the company's assets remain invested in equities, particularly American businesses.
Investment Declines
The value of Berkshire Hathaway's equity portfolio decreased from $354 billion to $272 billion during 2024. This was largely due to sales of the company's stake in Apple (AAPL).
Reflections on Mistakes
Buffett acknowledged making mistakes in evaluating businesses and assessing management abilities. He highlighted the importance of hiring trustworthy leaders and allocating capital wisely.
Tax Contributions
Berkshire Hathaway paid $26.8 billion in taxes in 2024, the highest amount ever paid by an individual company to the US government.
Praise for American Economy
Buffett touted the "American miracle" of economic growth, crediting sustained savings culture and compounding over time. He expressed optimism for the future, with plans to continue expanding the company's impact.
Annual Meeting
This year's annual meeting on May 3 will feature a revised schedule, with the Q&A session ending earlier and only Abel joining Buffett on stage for the second half.