Berkshire Hathaway’s shares gained momentum as operating earnings surged, but the company’s investment gains from its portfolio slowed significantly in the fourth quarter, dropping to $5.2 billion from $29.1 billion in the same period the previous year. For the ninth consecutive quarter, Berkshire sold more equities than it purchased, with total equity sales exceeding $134 billion in 2024. Notably, Warren Buffett, the 94-year-old chairman, has been reducing Berkshire’s two largest equity holdings, Apple and Bank of America. This selling activity contributed to a record cash pile of $334.2 billion, up from $325.2 billion at the end of the third quarter.
In his annual letter, Buffett, often referred to as the “Oracle of Omaha,” emphasized that holding a record amount of cash does not indicate a diminished interest in buying stocks or businesses. “Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities,” he wrote, adding that this preference would remain unchanged. Buffett attributed the lack of aggressive buying to high market valuations, stating that “often, nothing looks compelling.” He also expressed confidence in Greg Abel, his chosen successor, comparing Abel’s equity-picking ability to the late Charlie Munger.
Berkshire’s stock buyback program remains on hold, with no shares repurchased in the fourth quarter of last year or in the first quarter of 2025 through February 10. While some investors and analysts have expressed frustration over the lack of action, others trust Buffett’s conservative approach will position the company to capitalize on opportunities during the next market downturn.
“Shareholders should take comfort in knowing that the firm continues to be managed to survive and emerge stronger from any economic or market downturn by being in a financial position to take advantage of opportunities during a crisis,” said Bill Stone, chief investment officer at Glenview Trust Company and a Berkshire shareholder.
Berkshire concluded 2024 with a strong performance, rallying 25.5% and outpacing the S&P 500, marking its best year since 2021. The stock has risen more than 5% so far in 2025.
— news from CNBC