3 Key Takeaways from Warren Buffett’s Annual Letter to Berkshire Hathaway Shareholders

Warren Buffett’s hotly anticipated annual letter to Berkshire Hathaway (BRK.A)(BRK.B) shareholders dropped on Saturday, alongside better-than-expected fourth-quarter results. 

Below, we look at some of the key takeaways from Buffett’s letter. 

Berkshire Sold Stocks, But Will Always Favor Equity

Berkshire Hathaway’s total cash, cash equivalents, and short-term U.S. Treasury holdings stood at $334.2 billion at the end of the year, more than double its $163.3 billion stash at the end of 2023. 

Buffett on Saturday reassured investors that despite Berkshire’s swelling cash pile, “the great majority” of their invested money is in equities, not cash. 

Berkshire was a net-seller of stocks last year, buying $9.2 billion of stock and selling more than $143 billion. However, Buffett explained that the value of Berkshire’s non-marketable securities—that is, equity in companies that do not trade publicly, including those Berkshire owns outright—“remains far greater than the value of the marketable portfolio.” (Emphasis Buffett’s.)

Buffett insisted Berkshire would always prioritize owning businesses over cash. “Paper money can see its value evaporate if fiscal folly prevails,” he wrote. “Businesses, as well as individuals with desired talents, however, will usually find a way to cope with monetary instability.”

Buffett warned in last year’s shareholder letter that investment opportunities fitting Berkshire’s philosophy—buy good businesses at fair prices—were few and far between. But the company did find some targets last quarter. Berkshire opened a new position in Modelo maker Constellation Brands (STZ) and increased its stakes in Dominos Pizza (DPZ), Occidental Petroleum (OXY) and Pool Corp. (POOL) in the fourth quarter. 

Berkshire To Hold Japan Investments for Long Term

The vast majority of Berkshire’s investments are in U.S. firms, but the company last year increased its stakes in five Japanese companies that resemble Berkshire to a certain degree. ITOCHU, Marubeni, Mitsubishi, Mitsui, and Sumitomo are large conglomerates that own stakes in a variety of businesses operating across the globe.

Buffett praised the businesses in his letter on Saturday, writing favorably of their prudent use of capital and fair approach to executive compensation. “Our holdings of the five are for the very long term, and we are committed to supporting their boards of directors,” Buffett wrote, before suggesting Berkshire would likely increase its investments in the companies. 

The investments, which Berkshire began to make in July 2019, have so far been a good bet. Berkshire’s initial investment of $13.8 billion was worth $23.5 billion at the end of the year. 

‘Mistakes—Yes, We Make Them’

According to Buffett, present-day Berkshire Hathaway was founded on a mistake. Shortly after Buffett bought Berkshire in 1965, his long-time business partner Charlie Munger, “spotted my obvious error immediately: Though the price I paid for Berkshire looked cheap, its business – a large northern textile operation – was headed for extinction.”

The balance between little mistakes and big wins was a recurring theme of Buffett’s letter. “A single winning decision can make a breathtaking difference over time,” he wrote, citing his partnership with Munger as one example. “Mistakes fade away; winners can forever blossom,” he said, calling to mind his massively lucrative investments in long-term holdings like Coca-Cola (KO) and American Express (AXP).

Last year, insurance was Berkshire’s big winner. GEICO reported more than $7.8 billion in underwriting earnings in 2024, up from $3.6 billion in 2023 and a $1.9 billion loss in 2022. Surging insurance earnings, Buffett noted, offset weakness elsewhere. Earnings declined last year at half of Berkshire’s 189 subsidiaries, which Buffett said included “a few rare gems, many good-but-far-from-fabulous businesses and some laggards that have been disappointments.”

Buffett suggested that owning up to mistakes was a Berkshire tradition he’s confident Greg Abel, his named successor as CEO, will uphold. Abel “understands that if you start fooling your shareholders, you will soon believe your own baloney and be fooling yourself as well,” he wrote.