Warren Buffett walks on the floor and meets Berkshire Hathaway shareholders prior to their annual meeting in Omaha, Nebraska on 3 May 2024.
David A. Grogen | CNBC
The mystery about the surprisingly defensive attitude of Warren Buffett was deepened during the weekend.
The 94-year-old CEO of Berkshire Hathaway Sold more shares in the last quarter and grew a record cash pole even greater to $ 334 billion, but was unable to explain in his long -awaited annual letter why the investor known for his sharp stock purchases over time was apparently the shutters.
Instead, Buffett said that this attitude in no way represented a step for his love for shares.
“Despite what some commentators are currently considering an extraordinary cash position in Berkshire, the vast majority of your money remains in shares,” Buffett wrote in the annual letter of 2024 that was released on Saturday. “That preference will not change.”
Berkshire’s monstrous ownership of cash has asked questions with shareholders and observers, especially because the interest rates are expected to fall from their multi -year highlights. In recent years, the Berkshire CEO and chairman have expressed frustration about an expensive market and few options. Some investors and analysts have become impatient with the lack of action and have asked a statement why.
Despite his repeated sale of shares, Buffett said that Berkshire will continue to prefer shares over money.
“Shareholders of Berkshire can be sure that we will forever use a considerable majority of their money in shares – usually US shares, although many of these international meaning operations will have,” Buffett wrote. “Berkshire will never prefer the ownership of money-equivalent assets above the ownership of good companies, whether it is checked or only partially ownership.”
Shareholders will have to wait a little longer, it seems that the conglomerate network established on Omaha sold shares for a ninth consecutive quarter in the last period of last year, according to the company’s annual report, which was also released on Saturday.
All in all, in 2024, Berkshire sold more than $ 134 billion in shares. This is mainly due to reducing Berkshire’s two greatest equity – Apple And Bank of America.
In the meantime, it seems that Buffett also does not find its own stock attractive. Berkshire continued his purchase and bought no shares in the fourth quarter or in the first quarter to 10 February.
This despite a huge increase in operational income reported by the conglomerate on Saturday.
‘Often nothing looks fascinating’
Buffett is sitting on his hands in the midst of a raging bullmarkt that has won the S&P 500 more than 20% for two years in a row and has been going to the Green again this year. Some cracks started to develop last week, with some worries that grow over a slowing economy, volatility of rapid policy changes by the new President Donald Trump and general stock values.
The shares of Berkshire rose 25% and 16% respectively in the last two years and have risen by 5% this year.
Buffett perhaps offered a small hint about share valuations that are a concern in the letter.
“We are impartial in our choice of stock vehicles and invest in both varieties based on where we can best use your (and my family) savings,” Buffett wrote. “Often nothing looks attractive; we are very rarely our knee-deep in opportunities.”
In this year’s letter, Buffett endorsed designated successor Greg Abel in his ability to choose Equity opportunities, even with him compared to the late Charlie Munger.
“Often nothing looks attractive; very rarely are we our knee-deep in opportunities. Greg has shown his ability to act vibrantly at such times as Charlie,” Buffett said.
During the annual meeting of last year, Buffett surprised many by announcing that Abel, vice-chairman of non-insurance, will have the last word about all Berkshire investment decisions, including the supervision of the public stock portfolio.
Some investors and analysts have speculated in the past year that Buffett’s conservative movements in the past year are not a market call, but he prepares the company by building too large positions and cash for him for a day in to put.
Buffett did indicate that he would use capital in one area: the five Japanese trading houses that he started buying for almost six years.
“Over time you will probably see the ownership of Berkshire of all five somewhat increasing,” he wrote.