Billionaire investor Warren Buffett, the chairman and CEO of Berkshire Hathaway, has released his latest annual letter to shareholders, offering valuable lessons on investing, business decisions, and the future of the company.
Despite concerns over Berkshire Hathaway's growing cash reserves, Buffett remains steadfast in his preference for equities, highlighting the importance of long-term investments in successful American businesses.
Buffett, now 94, acknowledged his role as a mentor to his successor, Greg Abel, who will eventually take over as CEO.
In his letter, Buffett explained that while he will continue to manage Berkshire's portfolio, Abel has already demonstrated his ability to make key decisions during rare moments when opportunities are abundant.
Buffett, in his characteristic frankness, stated that "often, nothing looks compelling; very infrequently we find ourselves knee-deep in opportunities."
Regarding Berkshire's investment strategy, Buffett shared that despite the company's large cash pile—currently sitting at $334.2 billion—most of the funds remain invested in stocks, Yahoo said.
Buffett emphasized that Berkshire will never prioritize holding cash over acquiring quality businesses. "Berkshire will never prefer ownership of cash-equivalent assets over the ownership of good businesses, whether controlled or only partially owned," he wrote.
🚨 BREAKING:
— Warren Buffett Stock Tracker (@BuffetTracker) February 22, 2025
Berkshire Hathaway just dropped their legendary annual letter announcing they are sitting on a $334.2B cash pile
They also paid a massive $26.8B in taxes - 5% of all U.S. corporate taxes
🧵 Here's the full breakdown page by page: pic.twitter.com/u8gzY5phTE
Warren Buffett Reflects on America's Economic Growth in Annual Letter
Buffett also addressed the broader economic landscape, reflecting on the prosperity of the United States and the importance of savings and investment in driving the country's growth.
According to AP News, he noted that America's progress in the past 235 years has far exceeded the expectations of its early settlers.
Even though there have been challenges along the way, including the Civil War and economic disruptions, the US has become a global leader in innovation and wealth creation.
On the subject of mistakes, Buffett candidly acknowledged that he has made his share, both in terms of business acquisitions and personnel decisions.
However, he pointed out that even failures can provide valuable lessons, especially when they lead to the identification of future opportunities. "Mistakes fade away; winners can forever blossom," Buffett remarked, referring to notable successes like his investment in GEICO and the partnership with Charlie Munger.
Looking ahead, Buffett reassured shareholders that Berkshire's strategy of investing in quality American businesses would continue, even though opportunities may be rare.
He expressed confidence that the company's investments in equities, particularly those with international operations, would continue to deliver long-term growth.
Buffett also reiterated his belief that paper money and fixed-coupon bonds are vulnerable to inflation, and that equity investments provide a better hedge against economic instability.
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