Warren Buffet's annual letter to shareholders: Expectations, cash pile, US markets and more

Warren Buffet released his annual letter to shareholders of his company Berkshire Hathaway, along with company's earnings for the December 2023 quarter. The Oracle of Omaha paid tribute to his longtime friend and right-hand man Charlie Munger, who passed away in late 2023.

Munger, who served as vice-chairman of Berkshire until his death in November 2023 at the age of 99, is remembered as the 'architect' by his friend, who remembered him in the first quarterly report following his demise. Berkshire's cash pile swelled to a record in the fourth quarter of 2023.

In his annual letter to shareholders of Berkshire Hathaway, Buffet said that he sees no chance of 'eye-popping performance' in the coming months. "There remain only a handful of companies in this country (US) capable of truly moving the needle at Berkshire," he said.

Buffet believes that the US is the only place for meaningful capital deployment and out of the US, there are no candidates to become options for this company. Berkshire is ready to step in should financial disaster strike - nothing such market seizure may offer it an 'occasional large-scale opportunity'.

Berkshire occupies nearly 6 per cent of the universe in which it operates, states Warren Buffett in his letter. He said that doubling such a huge base is not possible within a period of five years. "We never forget that, though investor's money is commingled with ours, it does not belong to us," he said.

Emphasizing on the need of clear and direct communication from to the brass of management, Buffet said that investors are entitled to hear every year, both the good and bad news, delivered directly from their CEO and not from an investor-relation officer or communication consultant forever serving optimism and syrupy mush.

Echoing his commitment to reward investors, Buffet said that Berkshire should do a bit better than the average American corporation, and more importantly, should also operate with materially less risk of permanent loss of capital. He said that anything beyond slightly better is his wishful thinking.
 

Berkshire Hathaway Inc Class A and Class B shares have surged 14 per cent and 17 per cent, respectively, in the year 2024 so far. These stocks settled at $6,28,930.20 and $417.22 on Friday.

Also read: Indus Towers & Coal India: Here's what Akshay Bhagwat of JM Financial says on these 2 stocks