By Jonathan Stempel
NEW YORK (Reuters) – Warren Buffett on Saturday sent a cautionary message to the U.S. government on Saturday in his annual letter to Berkshire Hathaway Inc shareholders, urging Washington to maintain a stable currency and take care of those who get “short straws in life.”
“Paper money can see its value evaporate if fiscal folly prevails,” Buffett wrote. “In some countries, this reckless practice has become habitual, and, in our country’s short history, the U.S. has come close to the edge.”
The 94-year-old Buffett, arguably the world’s most famous investor, also acknowledged his advanced age in the letter, telling shareholders he now uses a cane and will spend less time fielding their questions at Berkshire’s annual meeting in May.
He nonetheless assured shareholders they would be in good hands after he turns over the conglomerate’s reins to Vice Chairman Greg Abel, saying Abel has “vividly shown his ability” to deploy capital.
Buffett’s letter was accompanied by Berkshire’s annual report, where it reported a third straight record annual operating profit, rising 27% to $47.44 billion.
The company also ended 2024 with a record $334.2 billion of cash and equivalents, reflecting high valuations and aggressive stock sales, especially Apple. Berkshire has been a net seller of equities for nine straight quarters.
Despite his concerns about the country’s fiscal situation, Buffett said his company will continue to prefer owning equities, primarily U.S. stocks, over cash, adding Berkshire is “not finished.”
Buffett did say Berkshire is likely to increase its stakes in all five Japanese trading houses it holds: Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo.
Berkshire invested $23.5 billion in those companies at year end.
Buffett has lamented the lack of buying opportunities over the last few years as stocks regularly set new highs, with the Standard & Poor’s 500 hitting a new high on Wednesday and the Nasdaq just 3% below its December 16 peak.
Berkshire’s own stock price has risen 15% in the last year, while the S&P 500 rose 18%. Over the last decade, Berkshire’s stock price has risen 225%, while the index rose 241% including dividends and 185% excluding dividends, Reuters data show.
Buffett is expected to disclose more about Berkshire and its outlook on May 3 when the company hosts its annual meeting in Omaha, Nebraska.
The meeting, which typically draws tens of thousands of people, will be shorter this year and not feature its traditional film.
In discussing his age, Buffett said he talks regularly on Sundays with his 91-year-old sister Bertie, using an old-fashioned phone.
“We cover the joys of old age and discuss such exciting topics as the relative merits of our canes,” he said. “In my case, the utility is limited to the avoidance of falling flat on my face.”
(Reporting by Jonathan Stempel, in New York; Writing by Carolina Mandl in New York; Editing by Diane Craft)
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