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Berkshire Hathaway, Warren Buffet’s investment company, saw its cash position rise to 167.7 billion dollars (154.6 billion euros) last year. It notices too few new investment opportunities.
The publication of the annual figures of the American investment company Berkshire Hathaway always receives a lot of attention among investors. They want to know what CEO Warren Buffett – for many the best investor ever – thinks about the market. The annual report is always accompanied by a ‘letter’ from the now 93-year-old but still bright American businessman.
In his letter, Buffett explicitly addressed his companion Charlie Munger, who died at the end of last year, at the age of 99. He called his good friend the architect of today’s Berkshire, an investment company that emerged from Buffett’s 1962 acquisition of a textile factory called Berkshire.
The basic principles of Munger and Buffett? Investing in companies with a strong position in their market, such as Coca-Cola, Apple or a number of insurers, and holding those shares for a long time. And whether that is successful: in just over ten years, the value of Berkshire Hathaway quadrupled.
The Oklahoma holding company posted an operating profit of $37.4 billion last year, an increase of 17 percent compared to the previous year. The insurance activities in particular contributed to the profit. They benefited from higher interest rates and relatively normal weather conditions in the United States, which meant they had to pay out less damage.
Purchase own shares
The problem with Buffett is that he currently does not find enough companies that meet his investment criteria: companies that are not too expensively priced with great long-term potential. And if he does find such a company, Berkshire Hathaway has grown so big and generates so much cash that an investment would have to be enormous to shrink the mountain of cash.
Buffett also found insufficient investments in 2023, causing the cash position of Berkshire Hathaway (which has a market value of 905.75 billion dollars or 835.15 billion euros) to rise to 167.7 billion dollars (154.6 billion euros). The alternative to shrink the cash pile is to purchase your own shares. In 2023, the company did this for 9.2 billion dollars (8.48 billion euros).
