On the evening of February 24th Beijing time, Berkshire Hathaway, a subsidiary of Buffett, released its financial report and an annual open letter to shareholders.
Taylor sorted out the key points.
Berkshire's operating profit for 2023 (referring to profits from insurance, rail, and utility businesses) was $8.481 billion, a 28% increase from $6.625 billion in the same period of 2022.
Berkshire's net profit for the fourth quarter of 2023 (including investment income from listed companies) was $37.574 billion; The net profit for the whole year of 2023 was 96.223 billion US dollars, which exceeded market expectations. The net loss for the same period last year was 22.819 billion US dollars.
Berkshire's cash reserves rose to a record high of $167.6 billion in the fourth quarter.
Buffett mentioned in his letter that Charlie Munger, who passed away in November last year, should always be hailed as the "architect" of Berkshire Hathaway, while he himself is like the company's general contractor, putting Munger's vision into action every day. In a sense, Munger is both like an older brother and sometimes like a loving father.
BNSF Railroad will become an important asset for Berkshire and the United States. In addition, we will maintain long-term investments in the five major Japanese companies, Itochu Corporation, Marubeni Corporation, Mitsubishi Corporation, Mitsui Corporation and Sumitomo Corporation, as well as Western Oil.
As of December 31, 2023, approximately 79% of the total fair value of Berkshire's equity investments were concentrated in American Express, Apple, Bank of America, Coca Cola, and Chevron.
Berkshire is capable of dealing with a serious financial disaster that it has never experienced before. When economic turmoil occurs, Berkshire's goal will be to become an asset to the country, just as it worked in a very small way from 2008 to 2009, and to help extinguish the financial fire, rather than becoming one of many companies that unintentionally or intentionally ignited the fire.
Buffett said that thanks to the American style of smooth sailing and the power of compound interest, if you make a few right decisions in your life and avoid making serious mistakes, the field we are in has been and will continue to be rewarding.
Buffett announced in the letter that his successor, Vice Chairman Greg Abel, is ready in all aspects to assume the position of CEO of Berkshire Hathaway tomorrow.
Berkshire is able to quickly respond to market turbulence with enormous funds and performance certainty, which may provide us with occasional large-scale opportunities. Although the stock market is much larger than in our early years, today's active participants are neither emotionally stable nor educated better than when I was in school. For whatever reason, the current market is showing more casino like behavior than when I was young. Casino now exists in many households, tempting residents every day.
Buffett said that only a few companies in this country can truly drive Berkshire's development, and we and others constantly choose them. Some we can estimate, while others we cannot. And, if we can, their prices must be attractive.
Berkshire has recently hit record highs, with A-shares trading at over $620000 and a market value exceeding $900 billion.
The stock price of the group rose by about 16% in 2024, after a 16% increase throughout 2023, which is more than twice the return rate of the S&P 500 index.