Berkshire Hathaway (BRK) launched its 2024 Letter to Shareholders (additionally see full 2024 Annual Report), which Warren Buffett historically additionally makes use of as an academic instrument. As at all times, I like to recommend studying it your self (solely 13 pages complete this yr). I get pleasure from studying the letter first (with no spoilers), then peruse the varied newspaper and media commentary, and at last re-read the letter once more. Listed below are my private highlights and commentary.
The overall market cap of Berkshire is now over $1 trillion {dollars}. The overall worth of their public fairness holdings was $272 billion. The overall of their money holdings was $334 billion. The overall worth of their managed companies was about $400 billion.
Berkshire’s companies are doing effective total, particularly their insurance coverage enterprise. Their managed companies simply proceed to churn out money, which clearly provides to the money pile if there aren’t any new investments. BRK parks practically all of its money in Treasury Payments, which made quite a lot of curiosity in 2024 as in comparison with the previous a number of years.
No important new purchases, in both public or personal companies. Berkshire needs to personal nice companies, however solely when paying the precise worth. Nonetheless, he didn’t give any indication that he thinks of us are fully nuts. On a relative foundation, you’ll be able to decide for your self with this chart of BRK’s money as a proportion of belongings. Supply: WSJ (present article).
American companies are nonetheless particular, though it takes vigilance to remain that means. Berkshire owns some worldwide corporations primarily based in Europe and Japan, however it has at all times been and stays predominantly US-based companies.
Berkshire shareholders can relaxation assured that we’ll without end deploy a considerable majority of their cash in equities – largely American equities though many of those may have worldwide operations of significance. Berkshire won’t ever want possession of cash-equivalent belongings over the possession of fine companies, whether or not managed or solely partially owned.
Paper cash can see its worth evaporate if fiscal folly prevails. In some nations, this reckless follow has turn out to be ordinary, and, in our nation’s quick historical past, the U.S. has come near the sting. Mounted-coupon bonds present no safety towards runaway foreign money.
Berkshire just isn’t shopping for Berkshire anymore. BRK has ceased with the buybacks, which implies that they’re both at or above his estimation of honest worth.
Endurance and self-discipline may be fairly boring. Altogether, the letter was a pleasant, acquainted reminder that the issues that made Berkshire Hathaway nice are nonetheless the identical. No surprises, no huge drama. Proper now, valuations are plump so they’re holding onto what they have already got and different accumulating money. Berkshire is disciplined sufficient to do nothing when there may be nothing good to do.
I can nonetheless hear Charlie Munger saying one thing to the tune of “It’s not the worst place to be, drowning in money!”
Previous shareholder letter notes.
