A 4,400,000% return and a $168 billion cash pile. Here are 6 juicy nuggets from Warren Buffett's new letter.

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A 4,400,000% return and a $168 billion cash pile. Here are 6 juicy nuggets from Warren Buffett's new letter.
Berkshire Hathaway CEO Warren Buffett.Rick Wilking/Reuters
  • Warren Buffett's letter to shareholders on Saturday included plenty of tasty tidbits.
  • It pegged Berkshire Hathaway's return under Buffett at 4,400,000% versus the S&P 500's 31,000%.
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Warren Buffett published his annual letter to Berkshire Hathaway shareholders on Saturday, a tradition that stretches back nearly six decades.

The famed investor's latest missive and full-year report were full of juicy nuggets for close readers. Here are six of the best.

1. Crushing the market

As of December 31, Berkshire stock was up nearly 4,400,000% since Buffett took control in 1965. That's about 140 times the S&P 500's 31,000% gain over the same period and represents a compounded gain of 19.8% a year versus the index's 10.2% annual gain.

Berkshire has jumped a further 16% this year, surpassing the S&P's 7% advance and extending its lead over the index. If you'd invested $100 with Buffett at the start of his Berkshire tenure, you'd now be worth well over $400 million.

2. Assets aplenty

Berkshire held $561 billion of net assets at the end of December, a 19% increase from a year earlier.

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Buffett said that was the largest net-asset figure recorded for any American business, and it was equivalent to 6% of the total worth of the S&P 500 in 2022, $9.5 trillion.

Berkshire's $1 trillion-plus of assets included $354 billion in stocks, $178 billion in property and equipment, $130 billion in Treasury bills, and $24 billion in inventories.

The company's nearly $500 billion in liabilities included unpaid losses, unearned premiums, and healthcare benefits in its insurance and other businesses.

3. Money to burn

Berkshire's mountain of cash and short-term investments swelled to a record $168 billion by December 31, about a $60 billion increase in only 15 months.

That figure is larger than the value of General Electric ($167 billion), Comcast ($166 billion), Uber ($162 billion), Nike ($160 billion), Walmart ($159 billion), American Express ($156 billion), or Pfizer ($155 billion).

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4. Cash-positive

Buffett and his colleagues have struggled to find bargains in recent years as stocks have marched to record highs, fierce competition from private-equity firms has made acquisitions more costly, and Berkshire's rising stock price has made buybacks less attractive.

The upshot is that on December 31, Berkshire held $354 billion in stocks, and $168 billion in cash and other short-term investments — a ratio of nearly 2-to-1.

Buffett has long said he vastly prefers to own productive assets such as stocks and businesses over dollars or bonds, so the fact that cash and Treasurys made up nearly one-third of Berkshire's portfolio is striking.

5. Renewed interest

Berkshire raked in about $6.1 billion in interest and other investment income last year — some 10 times the $589 million it collected in 2021 and more than the $5.5 billion worth of dividends in 2023.

Buffett and his team primarily attributed the massive surge to higher interest rates. In response to historic inflation, the Federal Reserve raised its benchmark rate from virtually zero to more than 5% between spring 2022 and last summer, which boosted the yields on government bonds.

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Berkshire previously made a negligible amount of interest on its cash and bonds, but now that that's changed, it can earn a solid return on them while Buffett continues the hunt for great businesses to own.

6. Tiny headquarters

Berkshire's total workforce grew to nearly 400,000 employees last year, but only 26 of them worked in the company's Omaha, Nebraska, headquarters.

That's because Charlie Munger, who Buffett hailed as the "architect" to his "general contractor," structured Berkshire as a decentralized, autonomous web of subsidiaries.

Berkshire-owned businesses from Geico (30,584 employees) to Pampered Chef (309) effectively operate independently and simply send their profits to HQ.

The system allows the investor to focus on what he does best: allocating capital within and outside his company and leaving day-to-day management to others.

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