Warren Buffett, the investment mogul, was seen surveying the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska on May 3, 2024. This event was significant as it was closely followed by a surge in Berkshire Hathaway’s shares, thanks to a dramatic increase in operating earnings. However, those hoping for an announcement on the company’s massive cash reserves may have been left wanting.
Shares of the Omaha-based conglomerate, which owns Geico and BNSF Railway, experienced a 1.2% premarket rise on Monday. This was in response to Berkshire’s impressive earnings report from the weekend. The company’s operating profit, derived from wholly owned businesses, soared by 71% to $14.5 billion in the fourth quarter, with a 302% profit jump in insurance underwriting, reaching $3.4 billion.
On the other hand, the growth of Berkshire’s investment gains from its portfolio holdings saw a stark deceleration in the fourth quarter, dropping to $5.2 billion from $29.1 billion in the previous year. Furthermore, Berkshire sold more equities than it purchased for the ninth consecutive quarter in the final three months of last year, culminating in total equity sales exceeding $134 billion in 2024. Notably, the investment guru reduced Berkshire’s two largest equity holdings, Apple and Bank of America, significantly.
This selling frenzy resulted in Berkshire’s cash reserves swelling to a new record of $334.2 billion, an increase from $325.2 billion at the close of the third quarter. In his annual letter, Buffett, often referred to as the “Oracle of Omaha,” assured that this record cash haul didn’t indicate a diminished enthusiasm for buying stocks and businesses.
Buffett further defended his preference for equities and hinted at high valuations as a reason for his cautious approach amidst a booming bull market. He also praised his chosen successor, Greg Abek, for his ability to spot equity opportunities, likening him to the late Charlie Munger.
Meanwhile, Berkshire’s buyback freeze remains in effect, with no shares repurchased in the fourth quarter or the first quarter of the current year. Despite some analysts and investors expressing frustration at the lack of action, others believe Buffett’s prudent approach will facilitate major 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,” stated Bill Stone, chief investment officer at Glenview Trust Company and a Berkshire shareholder.
Berkshire Hathaway had a robust performance last year, witnessing a 25.5% rally in 2024 and outperforming the S&P 500. The stock has already risen over 5% in 2025.
