11 Highlights of Warren Buffett’s Letter to Shareholders
by
dkass
·
February 22, 2025
- Berkshire’s operating earnings increased by 71% in Q4 2024 vs. Q4 2023 and its cash increased to $334 billion. Warren Buffett’s Letter to Shareholders was substantially reduced in size and content. Its Q&A during its annual meeting on May 3 will also be truncated. (Buffett is 94 years old.)
- Berkshire did not repurchase any of its shares in Q4 2024.
- Buffett: “Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities. That preference won’t change. While our ownership in marketable equities moved downward last year from $354 billion to $272 billion, the value of our non-quoted controlled equities increased somewhat and remains far greater than the value of the marketable portfolio,” he said, adding that “Berkshire shareholders can rest assured that we will forever deploy a substantial majority of their money in equities.”
- Buffett: “Berkshire last year made four payments to the IRS that totaled $26.8 billion. That’s about 5% of what all of corporate America paid.”
- Buffett: “Berkshire shareholders can rest assured that we will forever deploy a substantial majority of their money in equities – mostly American equities although many of these will have international operations of significance. Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses, whether controlled or only partially owned.”
- Buffett: “Paper money can see its value evaporate if fiscal folly prevails. In some countries, this reckless practice has become habitual, and, in our country’s short history, the U.S. has come close to the edge. Fixed-coupon bonds provide no protection against runaway currency. Businesses, as well as individuals with desired talents, however, will usually find a way to cope with monetary instability as long as their goods or services are desired by the country’s citizenry. So, too, with personal skills. Lacking such assets as athletic excellence, a wonderful voice, medical or legal skills or, for that matter, any special talents, I have had to rely on equities throughout my life. In effect, I have depended on the success of American businesses and I will continue to do so.”
- Buffett: “The American process has not always been pretty – our country has forever had many scoundrels and promoters who seek to take advantage of those who mistakenly trust them with their savings. But even with such malfeasance – which remains in full force today – and also much deployment of capital that eventually floundered because of brutal competition or disruptive innovation, the savings of Americans has delivered a quantity and quality of output beyond the dreams of any colonist. From a base of only four million people – and despite a brutal internal war early on, pitting one American against another – America changed the world in the blink of a celestial eye.
- Buffett: “P/C insurance continues to be Berkshire’s core business.”
- Buffett: “Greg, our directors and I all have a very large investment in Berkshire in relation to any compensation we receive. We do not use options or other one-sided forms of compensation; if you lose money, so do we.”
- Buffett: “Over the past two decades, our insurance business has generated $32 billion of after-tax profits from underwriting, about 3.3 cents per dollar of sales after income tax. Meanwhile, our float has grown from $46 billion to $171 billion. The float is likely to grow a bit over time and, with intelligent underwriting (and some luck), has a reasonable prospect of being costless.”
- Over the past 60 years, Berkshire’s per-share market value has achieved a compounded annual gain of 19.9% as compared to the S&P 500 (with dividends included) of 10.4%.
