This week, Warren Buffett wrote an annual letter to Berkshire Hathaway shareholders in 2024 providing insights into the company’s financial health and strategic decisions. Despite challenges, Berkshire reported a record operating profit of $47.4 billion, supported by significant gains from investments, mainly Treasury Bills. In 2024, the company’s cash reserves nearly doubled to $334.2 billion from $167.6 billion in 2023. Additionally, Buffett said insurance businesses “delivered a major increase in earnings,” led by car insurer Geico. Berkshire earned $9 billion in 2024 from insurance underwriting, a 66% increase from $5.4 billion in 2023. Notably, In the annual letter, Warren said, “Berkshire did better than I expected.”
Buffett defended the substantial cash position he has taken, he emphasized its role in maintaining liquidity for future investment opportunities. Buffett reaffirmed his preference for equities, noting a shift in the company’s portfolio from $354 billion in marketable equities in 2023 to $272 billion by the end of 2024. Despite this reduction, he stressed the increased value of non-quoted controlled equities. Buffet also said Berkshire aims to keep many of its equity investments in US companies, while pointing out that many of them have international operations.
Warren Buffett reflected on past mistakes in capital allocation and personnel decisions, focusing on the importance of transparency and integrity in leadership—a legacy he expects successor Greg Abel to continue. He also highlighted Berkshire’s significant tax contributions, totaling $26.8 billion for the year, about 5% of what all of corporate America paid.
With Greg Abel set to take over for Warren in the near future, Buffett assured shareholders of continuity in Berkshire’s strategic direction and corporate governance. His letter served as a reassurance, as well as providing investors valuable insight into the company’s future.
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