Warren Buffett admits Berkshire Hathaway surpassed his expectations in 2024 as profits soar—But why is he holding a record $334 billion in cash?
Warren Buffett, the CEO of Berkshire Hathaway, recently shared his 2024 annual letter to shareholders, highlighting the company's financial achievements and strategic decisions over the past year. Despite challenges, Berkshire Hathaway reported record operating earnings of $47.44 billion in 2024, a 27% increase from the previous year.
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How did Berkshire Hathaway achieve record profits amid economic challenges?
In his letter, Buffett noted that more than half (53%) of Berkshire's 189 operating businesses experienced a decline in earnings last year. However, the company benefited from a significant increase in investment income, largely due to higher yields from U.S. Treasury bills and a substantial increase in holdings of these short-term securities.
Why is Berkshire Hathaway holding a record $334 billion in cash?
By the end of 2024, Berkshire's cash and cash-equivalent holdings reached an unprecedented $334.2 billion, nearly double the $167.6 billion at the end of 2023. This surge is attributed to significant stock sales, including a reduction of Berkshire's stake in Apple. Despite this large cash reserve, Buffett emphasized the company's continued preference for investing in equities, particularly American businesses.
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