Billionaire investor Warren Buffett has once again made headlines as Berkshire Hathaway’s cash reserves reach a record £334 billion in 2024. In his annual letter to shareholders, Buffett reflected on his 60-year journey with the company, warned about poor financial management by governments, and shared how much tax Berkshire pays compared to tech giants.
Berkshire’s Growing Cash Reserves
Buffett’s £334 billion cash pile is the largest in the company’s history, showing that he is being cautious about big investments. He said that most businesses are too expensive right now, making good deals hard to find. Despite this, Berkshire made a profit of £37.4 billion last year, proving the company’s strong financial health. Buffett also revealed that Berkshire has reduced its exposure to U.S. stocks and is focusing on holding cash and treasury bonds until better opportunities arise.
Buffett’s Warning to Trump and US Leaders
Buffett raised concerns about reckless government spending, indirectly addressing Donald Trump and US policymakers. He warned that if governments keep spending carelessly, the economy could suffer in the long run. His message comes at a time when the US is struggling with rising debt and financial uncertainty.
Acknowledging Mistakes and Future Growth
In his letter, Buffett admitted that even Berkshire Hathaway has made some investment mistakes, highlighting past decisions that didn’t yield expected returns. However, he reassured investors that the company’s strong fundamentals and disciplined approach keep it in a solid position for future growth.
Berkshire Pays More Tax Than Tech Giants
Buffett pointed out that Berkshire Hathaway paid more in federal taxes than Amazon, Apple, and Microsoft combined. In 2023, the company paid nearly £5.6 billion in taxes, showing its strong earnings and Buffett’s belief that businesses should pay their fair share.
Who Will Lead Berkshire Next?
At 94 years old, Buffett knows succession planning is important. He reassured investors that Greg Abel, his chosen successor, is ready to take over. Abel has been leading Berkshire’s non-insurance businesses and is expected to continue Buffett’s careful investment approach. Buffett stated that he has full confidence in Abel’s leadership and that the transition will be smooth when the time comes.
Stock Market Insights: Small-Cap Stocks on the Rise
While Buffett’s letter focused on Berkshire’s strategy, investors are also watching small-cap stocks with potential growth. Some stocks, like Motilal Oswal Financial Services and NALCO, are trading below industry P/E levels and could rise by up to 75%. This aligns with Buffett’s long-term philosophy of value investing—identifying stocks that are undervalued but have strong potential.
Looking Ahead
As Berkshire Hathaway moves forward, Buffett’s cautious approach shows he won’t rush into spending unless the right opportunity comes along. His letter is not just a financial update—it also acts as advice for investors, governments, and business leaders. Meanwhile, market analysts suggest that investors looking for opportunities beyond Berkshire should keep an eye on promising small-cap stocks that could deliver significant gains.
