Warren Buffett will walk the floor and meet with Berkshire Hathaway shareholders ahead of the annual general meeting held in Omaha, Nebraska on May 3, 2024.
David A. Grogen | CNBC
The mystery surrounding Warren Buffett’s incredibly defensive stance deepened over the weekend.
The 94-year-old CEO of Berkshire Hathaway sold more shares in the recent quarter, adding another record cash pile to $334 billion, but investors were known for their sharp stock purchases over time. Why investors known for being unable to explain the annual letter. It looked like he was pounding the hatch.
Instead, Buffett said this attitude never represents a move away from his love for stocks.
“Even though some commentators now consider an extraordinary cash job in Berkshire, the majority of your money remains in stock,” Buffett said in his 2024 annual letter released on Saturday. I am writing. “That preference remains the same.”
The huge ownership of Berkshire cash has raised questions among shareholders and observers, particularly as interest rates are expected to fall from their multi-year highs. Berkshire’s CEO and chairman in recent years has expressed his dissatisfaction with the expensive market and the lack of opportunities to buy. Some investors and analysts are panicking at the lack of action and are seeking a reason for this.
Despite repeated sales of stocks, Buffett said Berkshire would continue to prefer stocks over cash.
“Berkshire shareholders can be sure we will deploy a significant portion of their money into stocks forever. Most of them have American stocks of importance internationally.” writes Buffett. “Berkshire does not prefer ownership of cash equivalent assets over ownership of a good business, whether controlled or partially owned.”
Shareholders will have to wait a little longer for Omaha-based Conglomerate Net to appear to have sold shares for nine consecutive times during last year, according to the company’s annual report released on Saturday. yeah.
Berkshire sold over $134 billion in shares in 2024. This is primarily due to a shrinking shareholding of Berkshire’s two largest shareholdings. It’s Apple and Bank of America.
Meanwhile, Buffett doesn’t seem to find his stock attractive either. Berkshire continued to halt repurchases and did not repurchase any shares in the fourth quarter or the first quarter until February 10th.
This is despite a significant increase in operating profit reported by the conglomerate on Saturday.
“In many cases, you can’t see anything that’s convincing.”
Buffett is sitting in his hands in a fierce bull market that has seen the S&P 500 win more than 20% for the second year in a row and move to the green again so far this year. However, while some cracks have begun to develop over the past week, concerns have risen about slower economics, volatility due to rapid policy changes from President Donald Trump, and overall stock valuations.
Berkshire stocks have grown 25% and 16% respectively over the past two years, and have so far increased 5% this year.
Buffett provided a small hint that stock valuations are probably a letter concern.
“We are fair in stock choices and invest in either diversity based on where you can best deploy your (and my family’s) savings,” writes Buffett. “We often see nothing convincing. Very rarely, we kneel at the opportunity.”
In this year’s letter, Buffett supported Greg Abel’s successor, even comparing him to the late Charlie Munger, in his ability to choose stock opportunities.
“In many cases there’s nothing convincing. Very rarely, we get to kneel at opportunities. Greg has clearly demonstrated his ability to act like Charlie,” Buffett said. I did.
At last year’s annual meeting, Buffett announced that Abel, the vice-chairman of the non-insurance business, will have final say on all Berkshire investment decisions, including overseeing public equity portfolios. I was surprised.
Some investors and analysts speculate that Buffett’s conservative move last year isn’t a market call, but he cuts a vast position and puts cash on his way to unfold one day. Preparing the company for Abel by building.
Buffett informed him that he would deploy capital to one area. He is five Japanese traders that he began purchasing for almost six years.
“Over time, we will see some increase in Berkshire ownership in all five,” he wrote.
