Berkshire Hathaway (BRK-B, BRK-A) CEO Warren Buffett defended the growing money stack of his company, thought about mistakes and again praised what he called the “American Miracle” of American economic growth in the past two centuries, because it Conglomerate Record reported operational income of $ 47.4 billion last year.
Writing in his annual letter of 2024 to the shareholders of Berkshire published on Saturday, Buffett said that these record profits were created despite more than half (53%) of the company operational companies that report a decrease in profit last year.
“In 2024, Berkshire did better than I expected, although 53% of our 189 operational companies reported a decrease in income,” Buffett wrote. “We were helped by a predictable large profit in investment income as the Treasury bill improves and we considerably increased our participations of these very liquid short-term effects.”
At the end of the year, Berkshire’s stacking cash and other cash-like effects, such as Treasury Bills, at $ 334.2 billion, almost double the $ 167.6 billion seen at the end of 2023. The value of the Berkshire stock portfolio was $ 272 billion at the end of the year; At the end of 2023 these companies were appreciated at $ 354 billion.
Large sale of the importance of Berkshire in Apple (AAPL) during the first, second and third quarters of 2024 saw the value of his interests in the tech gigantic valleys by around $ 100 billion.
Berkshire Hathaway chairman Warren Buffett lives the Berkshire Hathaway Inc annual shareholders meeting at Omaha, Nebraska, US, 3 May 2024. Reuters/Scott Morgan ·Reuters / Reuters
“Despite what some commentators currently see as an extraordinary checkout in Berkshire, the large majority of your money remains in shares,” Buffett wrote on Saturday. “That preference will not change.
“While our property tradable Equities went down from $ 354 billion to $ 272 billion last year, the value of our unecured shares has increased somewhat and continues far larger than the value of the tradable portfolio.
“Berkshire shareholders can be sure that forever we will use a considerable majority of their money in shares – usually US shares, although many of these will have international meaning activities.”
For the entire year 2024, the total income of Berkshire reached $ 371.4 billion, an increase of $ 364.5 billion the previous year. The investment profits achieved $ 41.6 billion, a decrease of $ 58.9 billion in 2023 and reflect how these figures can, to use Buffett’s words, “wild and unpredictable” from year to year. The business profit of $ 47.4 billion $ 47.4 billion excluding the profit or losing his investment portfolio.
Berkshire’s reported net income including his investment profits achieved $ 89 billion last year, compared to $ 96.2 billion in 2023.
At the top of this year’s annual letter, Buffett started reflections on the many mistakes made over the years on Berkshire Hathaway, but kept his comments General on the advice of the late Tom Murphy: “Praise by name, criticizing per category.”
“Sometimes I made mistakes in assessing the future economy of a company that I bought for Berkshire – each went wrong a case of capital allocation. That happens with both judgments about tradable shares – we see these as if partially Ownership of companies – and the 100% acquisitions of companies.
“At other times I made mistakes when assessing the capacities or loyalty of the Berkshire managers hires. The disappointments of Fidelity can hurt than their financial impact, a pain that can approach that of a failed marriage.”
“During the period 2019-23 I used the words ‘wrong’ or ‘wrong’ 16 times in my letters to you,” Buffett added. “Many other large companies have never used both words during that period.”
Buffett added that, given his advanced age, it “will not be long” before Greg Abel takes his place as CEO and writes annual letters to shareholders of Berkshire.
“Greg shares the Berkshire Creed that a ‘report’ is what a CEO of Berkshire owes owners every year,” Buffett wrote. “And he also understands that if you fool your shareholders, you will soon believe your own nonsense and you will fool yourself.”
In reference to the current investments of Berkshire, Buffett also noticed some of the “disappointments” that populate that portfolio.
“We have nothing that is a great resistance,” Buffett wrote, “but we have a song that I shouldn’t have buyed.”
Buffett, as he has done in recent years, also stood about Berkshire’s tax spending and praised the US economic headwind that has benefited him and his companies as an investor and operator.
In this year’s letter, Buffett noted that the $ 26.8 billion in taxes that Berkshire paid this year was paid for the most that an individual company ever paid to the US government.
“To be precise, Berkshire made four payments last year to the IRS, which amounted to a total of $ 26.8 billion. That is about 5% of what very businesslike America paid,” Buffett wrote.
“In one terribly Minor Way, Berkshire shareholders participated in the American Miracle by refraining from dividends, so that they choose to invest again instead of consuming, “Buffett wrote.
“Originally this reinvestment was small, almost meaningless, but over time it was scratched, as a result of the mixture of a persistent saving culture, combined with the magic of long -term composition.
“The activities of Berkshire now have an influence on all corners of our country. And we are not ready … On a day your nieces and cousins in Berkshire hope to send you even bigger payments than we in 2024. Explain it wisely.”
In addition to comments on the companies of Berkshire and other investment subjects, the letter from Buffett is closer to the changes in the company’s vast annual meeting, usually held in the first weekend in May.
This year’s edition, set up on 3 May, will contain ‘a somewhat changed schedule’, Buffett wrote on Saturday, with the famous Q&A session that started and ended earlier.
Buffett will again be accompanied by Berkshire Vice-presidents Greg Abel-Buffett’s heir clear and Ajit Jain for two and a half hours from 8:00 am After a short break, only Abel will be on stage, with the Q&A session close at 1 p.m.
In recent years, the Q&A from Buffett has been stretched with shareholders until 3 p.m. local time; In 2020 the Q&A ran well into the night.
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