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24 Feb 2024

Berkshire Hathaway posted a 28% fourth-quarter increase in operating earnings and announced its cash pile had reached a record $167.6 billion, as CEO Warren Buffett used his annual letter to shareholders to eulogize longtime business partner Charlie Munger, who died in November.


FILE- In this May 3, 2019 file photo, Berkshire Hathaway Chairman and CEO Warren Buffett, left, and ... [+] Vice Chairman Charlie Munger, briefly chat with reporters before Berkshire Hathaway's annual shareholders meeting. Buffett credited his longtime partner — the late Charlie Munger — with being the architect of the Berkshire Hathaway conglomerate he’s received the credit for leading and warned shareholders in his annual letter not to listen to Wall Street pundits or financial advisors who urge them to trade often. (AP Photo/Nati Harnik, File)

Copyright 2019 The Associated Press. All rights reserved

Fourth-quarter operating earnings came in at $8.5 billion, up from $6.6 billion in 2022, as the conglomerate’s total operating earnings for the year rose to $37.4 billion, up from $30.9 billion the year before.

The company’s operating earnings, which includes profits from its railroad, utilities and insurance businesses, were largely driven by big gains in the insurance sector in the fourth quarter—though railroad and utilities profits both dipped.

Buffett has long favored using operating earnings to gauge his company’s success over net earnings and the metrics required by Generally Accepted Accounting Principles, and he reiterated that in his latest letter to shareholders, referring to the net income figure as “worse-than-useless.”

The company’s ballooning cash pile has now increased for the sixth-straight quarter, but Buffett suggested Berkshire is still not in a position to make any major acquisition—because of the company’s massive size, “there remains only a handful of companies in this country capable of truly moving the needle at Berkshire,” and the company has “no possibility of eye-popping performance.”

Buffett also remembered Munger as “the architect” of Berkshire Hathaway, describing him as the “general contractor” charged with carrying out “the day-by-day construction of his vision.”

He described Munger as “part older brother, part loving father,” a figure who “never sought to take credit for his role as creator but instead let me take the bows and receive the accolades.”

“For whatever reasons, markets now exhibit far more casino-like behavior than they did when I was young,” Buffett wrote in his letter. “The casino now resides in many homes and daily tempts the occupants.”

$561 billion. That’s Berkshire Hathaway’s net worth, which Buffett noted in his letter is “by far” the largest GAAP net worth recorded by any American business.

Buffett has been investing for more than 80 years, making his first stock purchase in 1942 when he was only 11 years old. In 1965, he took over Berkshire Hathaway—a conglomerate now known for owning stakes in major U.S. companies like Coca-Cola, American Express, Geico and others. Buffett and Munger were well-known for their close relationship, with Munger acting as Buffett’s closest business partner. Munger’s death last year prompted an outpouring of tributes from across the business and finance world.

The 93-year-old Buffett has a net worth of more than $137 billion, according to Forbes’ evaluation, and is the sixth-richest person in the world. Munger’s net worth was estimated at $2.2 billion last year.