Warren Buffett and Charlie Munger attend a press conference during the Berkshire Hathaway shareholder meeting in Omaha, Nebraska on April 30, 2022.
CNBC
Berkshire HathawayWarren Buffett’s boss said his sprawling conglomerate could only slightly outperform the average U.S. company because of its sheer size and lack of buying opportunities that could make an impact.
The Omaha giant, which owns everything from BNSF Railway to Dairy Queen and a 6% stake in Apple, has by far the largest net worth recorded of any U.S. company and has now reached 6% of the total S&P 500 index. Buffett said in his report. his annual letter was published on Saturday.
“There are only a few companies left in this country that can truly make a difference for Berkshire, and they have been endlessly chosen by us and others,” Buffett wrote. “Some we can appreciate, some we can’t. And if we can, then they should have an attractive price.”
Berkshire’s last major deal was its purchase of the insurance company and conglomerate Alleghany for $11.6 billion in 2022. Oracle of Omaha also acquired a 28% stake in the energy giant. Occidental Petroleum, excluding the purchase of the entire company. These moves, while significant, fell short of expectations for the “elephant-sized” goal Buffett had wanted to achieve for years.
Berkshire had a record $167.6 billion in cash in the fourth quarter.
“There are virtually no candidates outside the US that would be meaningful options for capital allocation to Berkshire. Overall, we don’t have the ability to produce eye-popping results,” Buffett said.
Berkshire acquired a 9% stake in five Japanese trading companies – Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo, which Buffett intends to own for the long term.
Buffett, 93, said Berkshire’s group of diversified, high-quality businesses should deliver “slightly better” results than the average U.S. company, but anything more is unlikely.
“With our current business makeup, Berkshire should perform slightly better than the average U.S. corporation and, more importantly, should also operate with substantially less risk of permanent capital loss,” Buffett said. , is wishful thinking.”
Berkshire recently reached all-time highs, trading above $620,000 for Class A shares and having a market value of more than $900 billion.
The conglomerate’s shares are up about 16% in 2024, more than double the S&P 500’s return, after rising 16% for all of 2023.