Warren Buffett disclosed in his annual letter to Berkshire Hathaway shareholders that “it won’t be long” until he is succeeded as CEO by Greg Abel, who runs the company’s energy division.
Buffett, 94, the revered investor known as the Oracle of Omaha, was reflective and folksy as usual in his letter, published Saturday, which has come to serve as a gauge of the state of American business.
Buffett didn’t name names but seemed to touch on the political and cultural tumult of the moment in several sections of his 13-page letter. As ever, he urged investors to stay out of the weeds of the moment and remain focused on long-term performance, which has been his investing ethos for more than 60 years. He bragged about what he described as Berkshire’s record payment of $26.8 billion in federal taxes in 2024, and he gently ribbed other C-suite leaders for being loathe to publicly admit their mistakes when business plans go south.
“At 94, it won’t be long before Greg Abel replaces me as CEO and will be writing the annual letters. Greg shares the Berkshire creed that a ‘report’ is what a Berkshire CEO annually owes to owners,” Buffett wrote. “And he also understands that if you start fooling your shareholders, you will soon believe your own baloney and be fooling yourself as well.”
Buffett crunched some numbers to buttress his point.
“During the 2019-23 period, I have used the words ‘mistake’ or ‘error’ 16 times in my letters to you. Many other huge companies have never used either word over that span. Amazon, I should acknowledge, made some brutally candid observations in its 2021 letter. Elsewhere, it has generally been happy talk and pictures,” he wrote. “I have also been a director of large public companies at which ‘mistake’ or ‘wrong’ were forbidden words at board meetings or analyst calls. That taboo, implying managerial perfection, always made me nervous (though, at times, there could be legal issues that make limited discussion advisable. We live in a very litigious society.)”
Buffett wasn’t shy about pointing out Berkshire’s contribution’s to the greater good — and IRS coffers — compared to the tech giants that dominate Wall Street and pop culture these days.
Buffett asserted that last year Berkshire “paid far more in corporate income tax than the U.S. government had ever received from any company – even the American tech titans that commanded market values in the trillions.” Berkshire’s $26.8 billion represents “about 5% of what all of corporate America paid. (In addition, we paid sizable amounts for income taxes to foreign governments and to 44 states.),” he wrote. Since 1965, Berkshire has shoveled $101 billion into the U.S. treasury, Buffett wrote.
Buffett’s letter came as Berkshire reported glowing Q4 and full-year earnings. Operating earnings for its diverse collection of wholly owned companies — largely focused on insurance, energy, transporation and banking — grew some 71% while the level of cash on the company’s books hit $334.2 billion. It also owns minority stakes in such blue-chip companies as Apple, American Express, Coca-Cola and Moody’s. Buffett noted that the company of late has been investing more in a handful of Berkshire-like holding companies based in Japan: ITOCHU, Marubeni, Mitsubishi, Mitsui and Sumitomo.
Buffett addressed the high stack of greenbacks on Berkshire’s balance sheet by assuring shareholders that the company’s focus remains on investing in the securities of solid businesses that will pay steady returns over time.
“Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities. That preference won’t change,” Buffett wrote. “While our ownership in marketable equities moved downward last year from $354 billion to $272 billion, the value of our non-quoted controlled equities increased somewhat and remains far greater than the value of the marketable portfolio.”
Buffett also nodded to the volatility in the U.S. economy of late.
“Businesses, as well as individuals with desired talents, however, will usually find a way to cope with monetary instability as long as their goods or services are desired by the country’s citizenry. So, too, with personal skills. Lacking such assets as athletic excellence, a wonderful voice, medical or legal skills or, for that matter, any special talents, I have had to rely on equities throughout my life. In effect, I have depended on the success of American businesses and I will continue to do so,” Buffett wrote.
Buffett wrote wistfully about 2025 marking the 60-year anniversary of his taking the reins of Berkshire, which was invested in a failing textile business at the time. He paid tribute more than once to his longtime partner Charles Munger, who died in November 2023 at age 99.
“As Charlie and I have always acknowledged, Berkshire would not have achieved its results in any locale except America whereas America would have been every bit the success it has been if Berkshire had never existed,” Buffett wrote. “So thank you, Uncle Sam. Someday your nieces and nephews at Berkshire hope to send you even larger payments than we did in 2024. Spend it wisely. Take care of the many who, for no fault of their own, get the short straws in life. They deserve better. And never forget that we need you to maintain a stable currency and that result requires both wisdom and vigilance on your part.”
Buffett also made the case for capitalism at a time of global volatility and rising income disparity at home. Buffett seemed to argue that everyday Americans are deeply invested in the financial health of the nation even if it doesn’t seem that way on the surface.
“One way or another, the sensible – better yet imaginative – deployment of savings by citizens is required to propel an ever-growing societal output of desired goods and services. This system is called capitalism,” Buffett wrote. “It has its faults and abuses – in certain respects more egregious now than ever – but it also can work wonders unmatched by other economic systems.”
And he made the case for American exceptionalism at a time of immense social upheaval.
“The American process has not always been pretty – our country has forever had many scoundrels and promoters who seek to take advantage of those who mistakenly trust them with their savings. But even with such malfeasance – which remains in full force today – and also much deployment of capital that eventually floundered because of brutal competition or disruptive innovation, the savings of Americans has delivered a quantity and quality of output beyond the dreams of any colonist. From a base of only four million people – and despite a brutal internal war early on, pitting one American against another – America changed the world in the blink of a celestial eye,” Buffett wrote.
