Warren Buffett, the Chairman and CEO of Berkshire Hathaway Inc (BRK.A) and (BRK.B), published his annual shareholder letter for 2024 to his shareholders, and the annual meeting is occuring this weekend. This article provides highlights from Warren Buffett’s annual letter for 2024. The letter makes for excellent reading. Many experienced investors look to his wisdom annually.
As a historical note, the first annual letter on the Berkshire Hathaway website is from 1977. People can download the letters between 1977 and 2024 from the Berkshire Hathaway website. In addition, a book was published comprising of unedited letters from 1965 to 2014, including ones not on the website.
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Pete Liegl
Buffett spends some time eulogizing Pete Leigl, who ran Forest River for Berkshire Hathaway. Foret River manufactured recreational vehicles (RVs). He details how they met in 2005 when Pete wanted to sell his company to Berkshire. The story makes for interesting reading. However, the main point is about leadership and managerial skills. Buffett correctly points out that many great managers received degrees from prestigious universities, but many did not. Hence, school is not a criterion Buffett uses when picking a CEO. Buffett offers Ben Rosen and Bill Gates as examples, in addition to Pete.
Throughout this discussion, Buffett intertwines the concepts of mistakes. A mistake in buying a business or selecting a CEO can have far-reaching effects. However, a single winning decision can make a massive difference over time. The cardinal sin is not correcting the mistake. Instead, wishing the problem will go away.
Berkshire Hathaway’s Stock Holdings
Buffett’s investment vehicle owns a percentage of about a dozen huge and highly profitable businesses with household names like Coca-Cola, American Express, Apple, Moody’s Occidental Petroleum, Kraft Heinz, etc. The net value was $272 billion at the end of 2024, down from $354 billion as Berkshire sold off Apple shares.
Buffett discusses the effect of Berkshire’s size on taking and exiting equity positions. As a result, they now prefer to own good businesses outright. Berkshire now owns (100%) or controls (80%+) 189 businesses worth hundreds of billions.
Much has been made of Berkshire’s cash position, nearly $350 billion, but the conglomerate will probably always prefer equities. Paper money may lose value over time because of inflation or poor fiscal or monetary decisions. He then discusses the preference to invest a country’s savings to produce goods and services, i.e. capitalism.
Increasing Ownership of Japanese Companies
Berkshire started acquiring shares of Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo six years ago in 2019. It owns approximately 10% of each now at a total cost of $13.8 billion and a value of $23.5 billion. Buffett likes these companies because they pay about one-third of retained earnings in dividends, keep management compensation low, use earnings to invest in the business, and repurchase shares.
Buffett and Greg Abel are increasing their yen-denominated borrowing at fixed rates and investing it in these businesses for dividends. The dividend income is $812 million, while the interest payments are $135 million. Overall, it’s a good deal for Berkshire.
Controlled Businesses
Berkshire owns and controls a large and growing list of companies. The three largest are insurance and investment income, railroads, and utilities and energy. However, the conglomerate owns dozens of businesses.
Insurance
The insurance businesses performed well this year, setting sales, float, and underwriting profits records. Underwriting produced $9,020 million in earnings, while investment income was even greater at $13,670 million. The insurance business is very profitable because of its scale and Berkshire’s ability to take risks but write policies accounting for it. Moreover, Berkshire can handle catastrophic risk because of its immense float of $171 billion. The float is also investable, generating income.
Railroads
Railroads did about as well as last year. Berkshire owns BNSF, one of North America’s six largest rail systems. Rail moves enormous amounts of coal, chemicals, timber, cars, grain, etc., over hundreds to thousands of miles. Its operating earnings were $5,031 million, slightly less than the prior year.
Utilities and Energy
Berkshire Hathaway Energy (BHE) consists of regulated utilities and gas pipelines. Like railroads, this is a capital-intensive business. Operating earnings climbed to $3,730 million.
Taxes
Mr. Buffett discusses the amount of federal taxes paid by Berkshire Hathaway. In 2025, the company paid $26.8 billion, which was 5% of what all of corporate America paid. It is the most any single company has ever paid. Notably, this is a remarkable turnaround from 1965, when the firm paid none because of poor operating results as a textile company.
Warren Buffett Barely Beat the S&P 500 Index
Buffett’s annual shareholder letter ended by listing yearly gains for Berkshire Hathaway compared to the S&P 500 Index since 1965. In 2024, Buffett returned 25.5%, while the S&P 500 Index returned 25.0%.
An investment in 1965 in Berkshire Hathaway would have returned a compounded annualized gain of 19.9% and an overall increase of 5,502,284%. Over the same period, the S&P 500 Index had a compound annualized growth of 10.4% and an overall gain of 39,054%, with dividends included.
Anyone who started investing with Buffett in 1965 would be wealthy by this point. For instance, the Othmers were early investors in Buffet’s partnerships and eventually owned Berkshire Hathaway (BRK.A, BRK.B) stock by 1970. They nearly became billionaires before they died in the late 90s. Even people who invested later became wealthy. For example, Stewart Horejsi became a billionaire.
Final Thoughts on Highlights from Warren Buffett’s Annual Letter for 2024
Warren Buffett’s Annual Letter always makes for good reading. He covers a wide array of items about Berkshire. He closes with a discussion about the annual meeting, a 60th Anniversary book about Charlie Munger and his sister Bertie.
Prior Year Highlights
- Highlights from Warren Buffett’s Annual Letter for 2023
- Highlights from Warren Buffett’s Annual Letter for 2022
- Highlights from Warren Buffett’s Annual Letter for 2021
- Highlights from Warren Buffett’s Annual Letter for 2020
- Highlights from Warren Buffett’s Annual Letter for 2019
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Prakash Kolli is the founder of the Dividend Power site. He is a self-taught investor, analyst, and writer on dividend growth stocks and financial independence. His writings can be found on Seeking Alpha, InvestorPlace, Business Insider, Nasdaq, TalkMarkets, ValueWalk, The Money Show, Forbes, Yahoo Finance, and leading financial sites. In addition, he is part of the Portfolio Insight and Sure Dividend teams. He was recently in the top 1.0% and 100 (73 out of over 13,450) financial bloggers, as tracked by TipRanks (an independent analyst tracking site) for his articles on Seeking Alpha.