Berkshire Hathaway celebrates its meeting with record liquidity of $189 billion | Companies

In his latest letter to Berkshire Hathaway shareholders, Warren Buffett lamented the dearth of attractive investment opportunities in the market. Coinciding with the holding of the shareholders meeting in Omaha (Nebraska), the company has published its first quarter accounts that endorse this impression. The conglomerate led by the most famous investor in the world accumulated a record liquidity volume of 188,993 million dollars (about 175,500 million euros) as of March 31, according to the company’s quarterly report.

This record cash, which exceeds 167.6 billion at the end of the year, in the company’s coffers occurs at a time when interest rates are high and the stock market has reached high valuations. The Oracle of Omaha has taken advantage of the first quarter to sell shares for an amount of 19,972 million dollars and purchases for 2,691 million dollars.

The insurance division closed the first quarter with 28,891 million dollars in cash and equivalents to which are added 6,658 million dollars from the industrial division (railroads, services and energy). To this are added short-term Treasury securities amounting to an additional 153,444 million dollars.

The shareholders meeting held this Saturday is the first since the death of Charlie Munger, partner and friend and most faithful ally of Warren Buffett. In a preface to his final letter to shareholders, Buffett paid tribute: “In reality, Charlie was the ‘architect’ of the current Berkshire, and I acted as the ‘general contractor’ to carry out the day-to-day construction of the company. vision of him. “Charlie never tried to take credit for his role as creator, but rather he let me take the laurels and the praise,” he said.

This Saturday’s meeting will also be a tribute to Munger, where his jokes will be missed. Like every year, thousands of people have flocked to Omaha, a city of 485,000 inhabitants in the state of Nebraska, not far from the geographic center of the United States. For hours, he will answer questions from shareholders chosen by lottery in a multipurpose pavilion with capacity for about 18,000 attendees where there were queues from early this Saturday. Almost any topic can be raised with Buffett, but there are two that are prohibited: politics and his future investments.

The call Woodstock of capitalism It is much more than a meeting. It is quite a festival that includes a large fair of products manufactured or related to the group, a massive picnic for shareholders and parallel meetings, with a program that runs from Friday to Sunday. Buffett was seen and photographed this Friday at the fair, riding a golf cart.

As in recent years, the executive vice presidents responsible for the insurance areas, Ajit Jain, 70, and the rest of the businesses, Gregory Abel, 61, will also participate in the question session. Abel is designated to succeed Buffett as the group’s chief executive when the time comes, albeit with Buffett’s son Howard, 67, as non-executive chairman.

Apple sale

Before the meeting, the company has presented the accounts for the first quarter. In them, the net profit falls 64%, to 12,702 million dollars, but due to the variations during the quarter in the value of some of the investments it has in its investment portfolio. Approximately 75% of the value of its stock portfolio was concentrated at the end of the quarter in five companies, led by Apple ($135.4 billion). The other four are American Express (34.5 billion), Bank of America (39.2 billion), Coca-Cola (24.5 billion) and Chevron (19.4 billion).

The position in Apple has been reduced in one quarter from 174.3 billion to 135.4 billion, 22%. Although the shares of the company run by Tim Cook have fallen 11% on the stock market in that quarter, that only explains part of the variation. The other is because Buffett has decided to sell a significant portion of his stake, about 115 million shares. In the last quarter of 2024 he already sold about 10 million titles. Tim Cook is once again in the front rows of the Berkshire Hathaway shareholders’ meeting.

The company insists that accounting standards require these changes in value to be recorded in the income statement even if it is a stable investment and detracts from its value: “The amount of profits/losses on investments in a given quarter usually lacks relevance and provides figures of net profits (losses) per share that can be very misleading for investors with little or no knowledge of accounting standards,” he points out.

For this reason, Berkshire Hathaway prefers to focus on the operational evolution of its businesses. On that front, the news is good. Operating income grew by 30.4% to $11,222 million, thanks above all to the evolution of its insurance business.

What the company’s shareholders look at is, above all, the value of their own shares. Although Buffett has missed the opportunity to invest more aggressively in the middle of the pandemic (which he justified by his aversion to the risk of losses) and then the wave of artificial intelligence (which has boosted companies like Nvidia or Microsoft), his investments continue to generate good results and the price of Berkshire Hathaway has set all-time highs just over a month ago and is up 10.6% so far this year.

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