Warren Buffett Reflects on Berkshire Hathaway’s 2024 Performance in Annual Shareholder Letter

Berkshire Hathaway CEO Warren Buffett expressed optimism about the company’s performance in 2024, noting that it exceeded his expectations despite more than half of its operating businesses experiencing a decline in earnings. In his annual letter to shareholders released on Saturday, Buffett discussed the company’s growing cash reserves, recent investment decisions, and his continued belief in the resilience of the U.S. economy.

Berkshire’s Financial Performance in 2024

Berkshire Hathaway reported a record $47.4 billion in operating earnings last year, bolstered by increased investment income due to higher Treasury Bill yields. Despite a 53% decline in earnings across its 189 operating businesses, the conglomerate saw a significant rise in its cash reserves, which reached $334.2 billion by year-end—nearly double the $167.6 billion reported in 2023.

Meanwhile, the value of Berkshire’s equity portfolio fell from $354 billion to $272 billion, largely due to major sales of its Apple (AAPL) stake throughout 2024. However, Buffett reassured shareholders that equities remain the company’s primary investment vehicle, with a substantial majority of holdings concentrated in American companies with global operations.

Acknowledging Mistakes and Leadership Transition

Buffett opened his letter by reflecting on past mistakes in capital allocation, admitting misjudgments in assessing business economics and management capabilities. He emphasized the importance of honesty in corporate reporting, noting, “If you start fooling your shareholders, you will soon believe your own baloney and be fooling yourself as well.”

At 94 years old, Buffett acknowledged that his tenure as CEO is nearing its end, reaffirming that Greg Abel will soon take over the role. “Greg shares the Berkshire creed that a ‘report’ is what a Berkshire CEO annually owes to owners,” Buffett wrote.

The Impact of Berkshire’s Investments on the U.S. Economy

Buffett highlighted Berkshire’s contribution to the U.S. economy, stating that the company paid $26.8 billion in corporate taxes in 2024—the highest of any individual U.S. corporation. He also reiterated his belief in the “American miracle,” attributing Berkshire’s long-term success to reinvestment, a strong savings culture, and the power of compounding.

“Berkshire’s activities now impact all corners of our country. And we are not finished,” Buffett said, expressing confidence in the company’s future.

Changes to Berkshire’s Annual Shareholder Meeting

Buffett also announced changes to Berkshire’s annual meeting, scheduled for May 3, 2025. The highly anticipated Q&A session will begin earlier at 8:00 a.m. and conclude by 1:00 p.m., featuring Buffett alongside Vice Chairman Greg Abel. Ajit Jain will join for the initial portion of the session before stepping aside for Abel to take the stage.

As Berkshire Hathaway continues to navigate economic uncertainties and shifting market dynamics, Buffett’s latest letter provides valuable insight into the company’s strategy and future direction, reinforcing its commitment to long-term value creation for shareholders.