Warren Buffett, the renowned billionaire investor and chairman of Berkshire Hathaway, has defended the conglomerate’s record cash pile of $334.2 billion, asserting that the company remains committed to equity investments despite holding an extraordinary amount of cash.
In his annual letter to shareholders, the 94-year-old Buffett addressed concerns over Berkshire Hathaway’s current cash reserves, explaining that, although the company has been cautious in striking deals due to high valuations in US stocks, the majority of shareholder money remains tied up in equities.
“Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities,” Buffett wrote, reaffirming the company’s long-standing preference for equity investments. Although Berkshire’s ownership in marketable equities fell from $354 billion to $272 billion in 2024, the value of its non-quoted controlled equities increased slightly, still surpassing the marketable portfolio in value.
Buffett continued, “Berkshire shareholders can rest assured that we will forever deploy a substantial majority of their money in equities, mostly American equities, although many of these will have international operations of significance.”
Berkshire Hathaway, which Buffett has led for six decades, has grown into a $1 trillion conglomerate, with holdings in a wide range of industries, including insurance, railroads, energy, and stakes in some of America’s largest corporations like American Express, Coca-Cola, and Moody’s.
Buffett also shared encouraging news about the company’s performance in 2024, as Berkshire reported a record operating profit of $47.4 billion, a 27% year-on-year increase. The profit boost was released ahead of the company’s annual shareholder meeting in Omaha this May.
While continuing to focus on equity investments, Buffett also made remarks about his own future with Berkshire, noting that Greg Abel, 62, the company’s vice-chairman, would soon succeed him as CEO. Reflecting on his age and use of a cane, Buffett humorously mentioned that the cane helped him avoid “falling flat on my face.”
The annual letter also included a cautionary statement regarding the stability of the US dollar, with Buffett warning that “paper money can see its value evaporate if fiscal folly prevails,” as concerns about inflationary risks and potential tariff wars grow under the policies of former President Donald Trump.
In addition, Buffett addressed changes at Berkshire Hathaway regarding its stance on diversity, equity, and inclusion (DEI) practices. The company’s latest report notably dropped references to diversity in recruitment and retention practices after previously emphasizing efforts to “identify qualified candidates and promote diversity and inclusion.”
As the world’s sixth-richest person, with a net worth of $149.5 billion according to Forbes, Buffett’s decisions continue to have a significant impact on the financial world. Investors and analysts will closely watch the upcoming changes at Berkshire Hathaway, especially regarding the future of its cash reserves and investment strategies.
