Billionaire Warren Buffett reassured investors that Berkshire Hathaway will survive, despite financial risks and the absence of his deputy Charlie Munger.
In his annual letter to shareholders yesterday, Warren Buffett - CEO of Berkshire Hathaway - said the corporation worth more than 900 billion USD is "a fortress that can withstand even financial disaster".
“Berkshire is built to last,” he wrote.
Buffett insists the company is doing better than other US corporations despite the risks facing the US and global financial markets. However, Berkshire's huge size is also a problem that makes it difficult for the group to maintain its high business performance as before.
Berkshire's CEO also had the most sincere words for Deputy Charlie Munger - his long-time colleague who passed away last November. He called Munger the "architect" of Berkshire, while he was just the "general contractor".
Warren Buffett said it was Munger who inspired him to buy wonderful businesses at fair prices, rather than fair companies at bargain prices.
"Berkshire Hathaway would not be where it is today without Charlie's wisdom and ability to inspire. In some ways, he is like a brother and a father to me," CEO Warren Buffett wrote when referring to Munger.
Edward Jones analyst Jim Shanahan said Buffett "wouldn't have been as successful" without Munger. Thanks to his bold investment moves, Berkshire has a record cash pile of nearly $168 billion.
Investors believe that "Berkshire is hard to hurt" with its solid, diversified assets.
Billionaire Warren Buffett - CEO of investment company Berkshire Hathaway. Photo: AFP
The company's stock has risen nearly 4,385% since Buffett took over in 1965, a compound annual rate of 19.8%. But the Standard & Poor's 500 index shows that its stock has risen only about 10.2% per year.
According to the 2023 financial results, the 93-year-old billionaire's company earned $37.4 billion in revenue and $96.2 billion in net income. Insurance, railroads, industrials, energy and retail were the sectors that helped the group's profit increase 28%, to nearly $8.5 billion in the fourth quarter of 2023.
Along with that, investments in stock portfolios such as Apple, American Express, Bank of America and Coca-Cola... brought a net profit of 96.2 billion USD to the group.
Following the departure of Vice Chairman Munger, the 93-year-old billionaire assured investors that Vice Chairman and designated successor Greg Abel is "ready to be CEO of Berkshire in every way tomorrow."
Berkshire owns a wide range of companies, from auto insurer Geico and railroad operator BNSF to consumer brands like Dairy Queen, Duracell and Fruit of the Loom.
In the energy sector, in addition to holding shares in Japanese companies (Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo), the group also holds a 28% stake in oil company Occidental Petroleum. Buffett said he expected Berkshire to hold these shares "indefinitely".
Last month, billionaire Warren's group spent $2.6 billion to buy the remaining 20% of Pilot Travel Centers - the Haslam family's company - to take ownership of more than 725 truck stops in the US and Canada.
In his letter to shareholders, Warren Buffett also reiterated Berkshire's investment strategy of choosing businesses, not stocks, and the principle of "not losing money" when deciding whether or not to invest in a company.
This caution is also reflected in the fact that Berkshire is holding a record amount of cash (nearly $168 billion) and selling more stocks, about $24 billion, than it bought last year.
Buffett's letter did not mention Todd Combs and Ted Weschler, who are expected to oversee Berkshire's stock investments after his death.
Berkshire's annual shareholder meeting is scheduled for May 4 in Omaha. Following Munger's departure, only vice chairmen Greg Abel and Ajit Jain will share the stage with Buffett at the annual meeting, where he will spend hours answering questions from shareholders, with millions more watching online.
Minh Anh (according to Reuters )
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