Berkshire Hathaway Wraps Up a Stellar Year Amid Strategic Moves

OMAHA, Neb., December 15, 2024 – Berkshire Hathaway, the conglomerate led by Warren Buffett, concludes an impressive 2024, marked by a ​27% increase in its ​Class ​A actions ​and a series of notable strategic decisions. The company’s performance slightly exceeded the flexible ​Samp; P 500, strengthening ​its position as a beacon of resilience in the financial world. With shares above the $700,000 ​threshold, Berkshire is set to deliver ​its best annual performance since 2021 and ​ensure its ninth consecutive positive year, according to CNBC.

Buffett Strategic ​Digestion

Warren Buffett, the legendary 94-year-old ​investor, made waves with bold dives ​in two ​of Berkshire’s largest stakes: Apple and Bank of America. The conglomerate began to reduce its share of Apple in the fourth ​quarter of 2023, significantly increasing its sales in the second quarter of ​2024. By the end of the year, Buffett had sold nearly 67% of ​the shares of Berkshire Apple, leaving the conglomerate with about 300 ​million shares. The Bank of America also recorded ​significant reductions, with ​Berkshire’s retention ​falling below the critical 10% threshold after a sales ​pint in July. Despite these ​sales, ​both shares acted ​admirably in 2024, with Apple winning 28% and the Bank ​of America flying by more than 35%, driven by Donald Trump’s re-election and prospects for ​bank deregulation.

A reminder

Sales of shares of Berkshire Hathaway reached ​unprecedented levels in 2024, with 133 billion dollars of shares downloaded only in the first three quarters. This ​aggressive regulation has contributed to a historic step: Berkshire’s ​cash ​reserves for the first time exceeded $300 billion. The company’s cautious approach ​to supply continued, and Buffett largely ​focused on rising asset ​prices. The only major purchase this year was the remaining 8% in ​Berkshire Hathaway Energy for $2.37 billion in cash, $600 million in debt and Class B shares. This agreement, in which the heirs of Walter Scott, former director and close friend of Buffett, participate, highlights Berkshire’s long-term commitment to its energy subsidiary, which ​has been the majority since 1999.

Procurement in the midst ​of evaluation concerns

As the Berkshire stock market rally conducted higher ratings, Buffett chose to ​stop the company’s purchase program. In the ​third quarter, no action ​was required, and only $345 million was purchased in the second quarter, much less than the $2 ​billion recorded in the previous two ​quarters. Berkshire only reiterated its policy of resuscitation when it negotiates below its intrinsic value. Analysts believe that the ​decision to stop ​purchasing reflects Buffett’s approach to maintaining a strong cash ​position for future opportunities.

Succession preparation

Buffett’s deliberate accumulation of liquidity has fueled speculation about its long-term strategy. As Kevin Heal, an Argus analyst in a recent report, pointed out, “some of the $325 billion in cash will be used to ​invest in a ​”disaster” situation, either an industry or an individual company similar to what BRK did during the ​last ​economic crisis.” This ​approach is ​also seen ​as a solid foundation for Greg Abel, Buffett’s chosen successor. Observers predict that the next economic crisis will provide ​Berkshire leaders with ​an opportunity to make transformative investments and leave room for the conglomerate’s legacy.

New targeted ​investments

Despite the emphasis ​on immersions ​and the preservation of cash, Berkshire Hathaway ​made a handful of small capital investments in 2024. ​Notable ​additions included a ​$500 million stake in ​Domino’s Pizza and a ​modest position in Pool ​Corp., a ​pool equipment supplier. In addition, the company increased its share of SiriusXM to over 30%. These movements are largely attributed to the trust managers of Buffett, Ted Weschler and Todd Combs, who play an increasingly important role in the configuration ​of ​the conglomerate portfolio.

Berkshire’s disciplined strategy and prudent risk management underline its resilience and adaptability in the complex market dynamics. As the company closed its doors in 2024, its robust performance and strong strategic positioning signal continued under ​Buffett’s leadership and paved the ​way for a promising future under its eventual successor.