Berkshire Hathaway Inc. (NYSE: BRK.A) posted record annual profits and expanded its cash reserves to $334.2 billion, as Warren Buffett used his annual shareholder letter to issue a pointed message to Washington: spend wisely and protect those who draw the “short straws in life.”
The 94-year-old investing titan, widely regarded as one of the greatest capital allocators of all time, acknowledged concerns over the U.S. government’s rising fiscal deficits. His remarks came as investors worry about the potential extension of tax cuts originally championed by former President Donald Trump, which could further strain public finances.
Despite his advancing age—Buffett admitted to using a cane and plans to limit his speaking time at Berkshire’s annual meeting on May 3—he reassured investors that the company would remain in capable hands. He reaffirmed that Vice Chairman Greg Abel, 62, is well-prepared to lead the conglomerate, stating, “It won’t be long” before Abel assumes the reins.
Berkshire’s financials underscored the strength of its diversified business empire. The company reported a third consecutive record in annual operating profit, climbing 27% to $47.44 billion, while quarterly operating earnings surged 71% to $14.53 billion. Full-year net income totaled $89 billion, buoyed by gains from Berkshire’s investments in Apple Inc. (NASDAQ: AAPL) and American Express Co. (NYSE: AXP).
Buffett’s preference for equities over cash remains unchanged, though he noted that high valuations and limited attractive opportunities led Berkshire to sell more stocks than it bought for nine straight quarters, including reductions in its Apple holdings. Despite this, Apple remains Berkshire’s largest stock investment.
Marking his 60th year at the helm, Buffett reflected on Berkshire’s evolution from a struggling textile firm into a $1.03 trillion conglomerate with interests spanning insurance, railroads, energy, and retail. “Berkshire’s activities now impact all corners of our country. And we are not finished,” he wrote.
Buffett also delivered a sober warning about capitalism’s excesses, lamenting “faults and abuses—more egregious now than ever,” and cautioned that fiscal mismanagement could erode the stability of the U.S. dollar. He urged lawmakers to ensure economic participation remains broad-based, warning, “Take care of the many who, for no fault of their own, get the short straws in life. They deserve better.”
While Berkshire has not made a major acquisition since 2016, Buffett signaled that the company is likely to increase its $23.5 billion investments in five Japanese trading houses—Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo—while noting that other stocks remain expensive. The company’s sheer scale now prevents it from significantly outperforming market indices as it once did. Over the past decade, Berkshire’s stock has risen 225%, compared with a 241% gain in the S&P 500 including dividends.
At the upcoming annual meeting, Buffett will take a reduced role on stage alongside Abel and Vice Chairman Ajit Jain. While the event remains a pilgrimage for shareholders, it will feature fewer of Buffett’s personal touches, including the traditional opening movie crafted by his daughter Susie. Reflecting on age, Buffett quipped that he and his 91-year-old sister Bertie frequently discuss the “relative merits of our canes,” adding that his own is primarily to prevent him from “falling flat on my face.”
By: DNU staff