Warren Buffett’s latest annual letter left investors with more questions than answers over the weekend, as the 94-year-old CEO of Berkshire Hathaway defended his firm’s massive cash hoard while continuing to trim stock holdings.
Berkshire’s cash reserves surged to a record $334 billion, as the conglomerate net sold equities for a ninth consecutive quarter, shedding over $134 billion worth of stocks in 2024—primarily from its two largest holdings, Apple and Bank of America. Yet Buffett insisted this was no shift away from his love for stocks.
“Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities,” Buffett reassured shareholders in the letter released Saturday.
The cautious approach has fueled speculation, particularly as interest rates are expected to decline and markets remain strong. Some analysts believe Buffett is preparing Berkshire for his designated successor, Greg Abel, by consolidating cash for future investments.
Buffett provided few hints about where Berkshire might deploy capital next, aside from signaling an intent to increase its holdings in five Japanese trading houses. Meanwhile, the company continued its buyback pause, refraining from repurchasing any shares in the fourth quarter or early 2025.
While Buffett acknowledged that compelling investment opportunities are rare, he reaffirmed Berkshire’s commitment to equities, particularly American businesses with global reach.
For now, however, shareholders will have to wait and watch as Buffett, ever the patient investor, keeps Berkshire’s war chest full—waiting for the right moment to strike.
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