Warren Buffett’s Berkshire Hathaway jumps after earnings grew 71%
What exactly does the company own?
Shares in Berkshire Hathaway are up this morning as investors react to a bumper set of results — operating profit rose 71% in Q4 — while also digesting the ever-growing cash pile at the conglomerate.
Rainy day fund?
Investors who pay heed to Buffett’s moves for insights into the broader market have been nervous about Berkshire’s growing cash hoard over the years, wondering if the mountain of cash reflects a tacit fear of a market fall. So, the revelation that it had swelled to some $334 billion — the highest on record — compounded some investors’ jitters.
However, in last weekend’s annual letter, Buffett assured shareholders that “the great majority of your money remains in equities. That preference won’t change.”
Buffett is, of course, correct.
Taken at face value, cash and cash equivalents currently account for less than one-third of the company’s $1.03 trillion market cap. Another $272 billion is accounted for by its public stock portfolio, and the remainder would theoretically be the value of its actual operating businesses: companies predominantly in railroads, insurance, and energy, minus any associated debt or liabilities they have.
The sale of its biggest, highly appreciated holdings like Apple, which helped Berkshire hoard piles of cash by the end of last year, means that the company has also reached new highs in corporate taxes this year, paying a staggering $26.8 billion in 2024 alone, roughly 5% of the total taxes paid by US companies last year, per Buffett.
