February 23, 2025 – Berkshire Hathaway, the company owned byWarren Buffett, released its annual letter to shareholders yesterday evening.
In the letter, Buffett revealed that Berkshire’s performance in 2024 exceeded expectations, with operating earnings reaching $47.4 billion and a stock market return of 25.5%, surpassing the S&P 500’s gain of 25%.
Over the long term, from 1965 to 2024, Berkshire’s per-share book value increased by a compound annual rate of 19.9%, significantly outperforming the S&P 500’s 10.4%. Furthermore, Berkshire’s overall gain from 1964 to 2024 was an astonishing 5,502,284%, or more than 550,228 times, compared to the S&P 500’s 39,054%, or over 390 times.
Buffett admitted that he has no special talent in sports, music, medicine, or law, and has had to rely on stocks throughout his career.
Berkshire, he emphasized, will always invest most of its shareholders’ funds in stocks, never favoring cash over ownership in good businesses, whether they are controlled or partially owned.
Additionally, Buffett warned that the value of paper money could evaporate if fiscal policy mistakes are made. He noted that reckless practices have become habitual in some countries and that the U.S. has also come close to the brink in its brief history. Buffett urged the U.S. to never forget the need to maintain a stable currency.
Buffett disclosed that Berkshire’s investment in Japan’s five major trading companies stood at $23.5 billion at the end of last year, and ownership may increase in the future. He predicted that Greg Abel, his successor, and those who follow him will hold these positions for decades.
As Buffett approaches his 95th birthday in August, he announced that this year marks the 60th anniversary of his leadership at Berkshire. The annual shareholders’ meeting will be held in Omaha on May 3rd.
Regarding the succession plan, Buffett stated that Abel will soon replace him as CEO and take over the responsibility of writing the annual letter. Abel shared Berkshire’s creed: “If you start to fool your shareholders, you will soon believe your own bullshit and deceive yourself.”
