Warren Buffett, in his annual letter to shareholders on Saturday, reflected on the remarkable success of Berkshire Hathaway over the past 60 years. Since taking over the struggling textile company in 1965, Buffett has transformed it into a massive conglomerate. In his letter, he acknowledged making some mistakes but reassured shareholders that Greg Abel, his chosen successor, is not one of them. Buffett emphasized that Abel will be prepared to seize significant investment opportunities whenever they arise.
Growth and Tax Contributions Over the Years
Buffett noted that when he first took over, Berkshire Hathaway had paid zero income tax in the previous decade. Today, however, the company has grown so much that it paid $26.8 billion in corporate income tax last year, an amount Buffett described as “far more in corporate income tax than the U.S. government had ever received from any company — even the American tech titans that commanded market values in the trillions.”
A Message to the U.S. Government
Although Buffett typically avoids discussing politics, he urged the government to handle tax revenue responsibly.
“Thank you, Uncle Sam. Someday your nieces and nephews at Berkshire hope to send you even larger payments than we did in 2024. Spend it wisely. Take care of the many who, for no fault of their own, get the short straws in life. They deserve better. And never forget that we need you to maintain a stable currency and that result requires both wisdom and vigilance on your part,” he wrote, emphasizing his long-held Democratic ideals.
CFRA Research analyst Cathy Seifert commented, “I thought honestly in a very subtle way that was a powerful message.”
Berkshire’s Expanding Financial Strength
As Berkshire Hathaway continues to thrive, it now holds an impressive $334.2 billion in cash. This substantial increase comes after the company sold off much of its Apple and Bank of America stock, nearly doubling its cash reserves from the previous year’s $167.6 billion.
Buffett strategically used part of this cash last year to complete acquisitions, including spending $3.9 billion to buy the rest of Berkshire’s utility business from a former partner’s estate and another $2.6 billion to fully acquire the Pilot truck stop chain. Additionally, Berkshire increased its investment in five major Japanese conglomerates, totaling $13.8 billion over the past six years, which has now grown to a valuation of $23.5 billion.
Despite these investments, Buffett has struggled to find major acquisition opportunities in recent years. He also reaffirmed that he has no plans to introduce a dividend for shareholders.
Investor Bill Smead of Smead Capital Management remarked that Buffett’s cautious approach suggests he is “bearish as hell but won’t admit it.” According to Smead, Buffett likely believes the U.S. stock market is overvalued, leading him to seek better investment opportunities abroad.
Shorter Shareholder Meeting and Acknowledging Age
In what may be a recognition of his age, the 94-year-old Buffett announced that this year’s annual shareholder meeting in May will be shorter than usual. Instead of the usual extended Q&A session, Buffett and Berkshire’s vice chairmen will take questions from 8 a.m. to 1 p.m.
Buffett also mentioned that he now uses a cane to prevent falls, humorously adding that he wants to avoid “falling flat on my face.”
Berkshire’s Remarkable Stock Growth
Buffett began purchasing Berkshire stock in 1962 for just $7.60 per share. Today, the company boasts the most expensive stock in the world. Berkshire’s Class A shares closed at $718,750 apiece on Friday, although it also offers a more affordable Class B stock at $478.74 per share.
To commemorate Berkshire Hathaway’s 60th anniversary, Buffett announced that shareholders will have the opportunity to purchase a special book filled with untold stories and lessons from the company’s history at the annual meeting.