At 94, Warren Buffett is sitting on a mountain of billions of dollars. At the end of 2024, Berkshire Hathaway, the company that presides and directs for six decades and has made it a living legend, accumulated a liquidity position of 334,201 million dollars (about 320,000 million euros) in box, equivalent cashier and short -term treasure titles. It is an unprecedented figure: the Oracle of Omaha, the most influential investor in the world, does not find where to invest so much money.
The accounts published this Saturday show that the company had more money in box and treasure letters than in stock market investments. Buffett without finding just alternatives to place the money. Its portfolio of shares was reduced by 2024 from 354,000 to 272,000 million dollars, basically due to divestments.
During the past year, Berkshire Hathaway entered 143,359 million dollars with the sale of shares, but only made stock of stock market for 9,237 million dollars, an unprecedented lag in the group’s history. Some of his new bets are relatively anecdotal, such as his investments in Domino’s Pizza, in the signing of Poolcorp swimming pool or, the most recent of all,
Why do you prefer to accumulate so much liquidity? To begin with, the short -term treasure titles are giving profitability greater than 4%. To continue, economic uncertainty is increasing, with and a consumer confidence that has fallen with force by surprise. To this is added that the bag moves in historical maximums, without obvious opportunities.
Buffett argues that he was his late partner and friend Charlie Muger who made him change philosophy. He went from investing in reasonable businesses at wonderful prices to do so in wonderful businesses at reasonable prices. But Berkshire Hathaway does not finish finding great ideas now. “There is only a handful of companies in this country capable of really moving the needle in Berkshire, and have been selected incessantly for us and others. Outside the United States, there are basically no candidates who are significant options for capital deployment in Berkshire. In short, we have no possibility of spectacular performance, ”he lamented then.
Berkshire Hathaway is necessary to not pay dividends to shareholders because he always finds how to reinvest them. In his 60 years at the head of the company, Buffett only decided to pay shareholders dividend in 1967. “I don’t remember why I suggested this action to the Berkshire board of directors. Now it seems a bad dream, ”he says in his letter to the shareholders.
In theory, the idea has not changed, but the Oracle of Omaha dedicates part of the letter to this year’s shareholders, published this Saturday, to justify. “Despite what some commentators currently consider an extraordinary cash position in Berkshire, the vast majority of their money remains in shares. That preference will not change, ”he says, putting in the calculation not only the investments in the stock market, but also the non -listed companies that he has in property.
“Berkshire shareholders may be sure that we will always invest a large majority of their money in shares, mainly US actions, although many of them will have important international operations. Berkshire will never prefer the ownership of assets equivalent to effective to the property of good businesses, whether controlled or only partially participated, ”he adds. It does not become a myth of finance for investing in Treasury letters.
Berkshire Hathaway has 189 subsidiaries, most of its 100%property. “The set has a value of many hundreds of billions and includes some rare jewels, many good companies, but far from being fabulous and some lags that have been disappointing. We have nothing that is an important ballast, but we have several that should not have bought ”, on the other hand, there are investments in companies listed such as Apple, American Express, Coca-Cola, Moody’s and many more, until they add those 272,000 million. “In Wall Street you can buy small fractions of these jewels from Monday to Friday and, very occasionally, they are sold at bargain prices,” says Buffett.
The group has published its accounts of last year, with an increase of 27% in the operating benefit, to 47,437 million dollars. The net, less representative result in this case, fell 7.5%, to 88,995 million. “In 2024, Berkshire was better than expected, although 53% of our 189 operational companies reported a decrease in benefits,” says Buffett in his letter. “It helped us a great predictable gain in investment income, since the yields of the treasure bonds improved and substantially increase our holdings of these high -liquidity short -term values,” he adds.
Japanese conglomerates
Instead, he barely found opportunities to invest in the stock market. “Often, nothing seems convincing,” Buffett points out in his letter, in which he links the company’s success over time to the US market. Somehow similar to Berkshire Hathaway herself.
The group has taken positions in Ittohu, Marubeni, Mitsubishi, Mitsui and Sumitomo since 2019 with a very long -term investment horizon. “We simply look at their financial records and we were surprised by the low prices of their actions. As the years passed, our admiration for these companies constantly grew ”,“ each of the five companies increases dividends when appropriate, they repurchase their actions when it is sensible to do so, and their senior managers are much less aggressive in their programs of remuneration that his American counterparts, ”he adds.
Buffett had promised not to exceed 10% participation, but in his letter he announces that this has changed. “As we approached this limit, the five companies agreed to relax the roof moderately. Over time, Berkshire’s participation is likely to increase something in five o’clock, ”he says. The group invested $ 13.8 billion in those firms and their shares are already worth $ 23,500 million. “I hope Greg [Abel, que tomará el relevo de Buffett] And its eventual successors maintain this Japanese position for many decades, ”says the investor.
The Oracle of Omaha underlines in its letter the huge amount of companies that pay the group, the one that most in the United States: 26.8 billion dollars last year. And it seems to give advice to Donald Trump on how to spend them: “Thank you, Uncle Sam. Someday, your nephews and nephews of Berkshire hope to send you even greater payments than those we send you in 2024. Gastal it prudence. Take care of the many who, without being blamed, take the worst part in life. They deserve something better. And never forget that we need you to maintain a stable currency and that this result requires both wisdom and surveillance on your part, ”says Buffett, who has always shown sympathy for Democratic ideals and a concern about philanthropy and help to others.
There is, however, many clues for investors. For the second consecutive trimester, the firm has not even repurchased its own actions, something that usually does as a form of compensation to the shareholder, especially when it considers that they quote below their intrinsic value.
But it has let out the greatest investment opportunity of the last decade, the one linked to artificial intelligence, with companies such as NVIDIA, Microsoft or Alphabet. Even its replication in Apple has produced something at the wrong time, because the company conquered historical maximums after Berkshire reduced his positions in half.
Are Buffett losing his magic? With which the group measures its performance of the last five years it shows that the profitability of Berkshire Hathaway from 2019 to 2024 is 100%, compared to 97% of the S&P 500 and 128% of the stock market stock index (in which it is framed ). Of course, the revalorization of Berkshire Hathaway since 1964 is 5,502,284%, compared to 39,054% of the S&P 500. Warren Buffett has earned a pulse to be a legend.
