Increased Cash Holdings by Selling Apple and BAC
Higher Returns as U.S. Treasury Investments Grow
Insurance Profits Rise Thanks to Geico
Warren Buffett, Chairman and CEO of Berkshire Hathaway in the United States, playing bridge after the annual shareholders meeting in Omaha, Nebraska, on May 5, 2019 (local time). Berkshire Hathaway's stock price reached an all-time high on the 24th (local time) thanks to strong fourth-quarter earnings. / AP News · Yonhap News
The stock price of Berkshire Hathaway, the American investment company led by 94-year-old Warren Buffett, known as the "Sage of Omaha," reached an all-time high on the 24th (local time) thanks to strong fourth-quarter earnings.
Berkshire Hathaway Class A shares closed at $747,485.49 per share (approximately 1.07 billion KRW), up 4% from the previous trading day. During the session, the price reached as high as $755,968 per share (1.08 billion KRW). On the same day, the non-voting Class B shares also rose 4.1%, closing at $498.42 per share, marking an all-time high as well.
In a report released on the 22nd (local time), Berkshire Hathaway announced that its after-tax operating profit for the fourth quarter increased by 71% year-on-year to $14.5 billion (19.3 trillion KRW), setting a record high. Annual operating profit rose 27% year-on-year to $47.4 billion (63 trillion KRW), while net income decreased by 7.5% from the previous year to $89 billion (118 trillion KRW).
In his annual shareholder letter, Buffett explained the better-than-expected performance by stating, "With the improvement in Treasury yields, we earned a predictably large profit from investment income," adding that "significantly increasing our holdings of short-term liquid assets in Treasuries was helpful."
The insurance segment was led by the auto insurer GEICO. Berkshire earned $9 billion (12 trillion KRW) from insurance acquisitions last year, a 66% increase compared to $5.4 billion in 2023.
Another notable point is the record-high cash holdings. According to U.S. CNN and other media, Berkshire sold many of its shares in Apple, Bank of America (BAC), and others to secure cash, which was mainly invested in U.S. Treasuries. The size of these cash-equivalent assets increased from $325.2 billion in the previous quarter to $334.2 billion (445 trillion KRW) at the end of the fourth quarter, doubling in one year.
Now, market attention is turning to Buffett's successor. Having led Berkshire since 1965, Buffett recently hinted to shareholders that his retirement is imminent. In his recent annual letter to shareholders, he stated, "When I turn 94, not long after, Vice Chairman Greg Abel will take over as CEO and write the annual letter."
Buffett added, "Greg understands well the meaning of 'reporting,' which is Berkshire's belief, and the responsibility to shareholders," and "He also knows that if he starts deceiving shareholders, he will soon be deceiving himself."
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