Warren Buffett’s Annual Letter: From Share Buybacks to Corporate Accounting, Here’s What He Had to Say
By Warren Buffett, the CEO of Berkshire Hathaway (BRK-A, BRK-B), released his annual letter to shareholders on Saturday.[0] In it, he addressed topics such as share buybacks, taxes, corporate accounting, and his optimism about the U.S. economy.[1] Buffett's message to investors was clear: “The weeds wither away in significance as the flowers bloom. Over time, it takes just a few winners to work wonders. And, yes, it helps to start early and live into your 90s as well.”[2]
Buffett highlighted the fact that Berkshire has contributed about 0.1% of the $32 trillion in taxes collected by the U.S. Treasury in the decade to 2021, and expressed his company's willingness to fund the country responsible for its prosperity. He also noted that Berkshire paid $32 billion in corporate taxes in the decade ending 2021, amounting to .1% of all federal taxes collected in that period.
At Berkshire, Buffett and the company are investing in an unmatched collection of huge and diverse businesses.[3] For example, they have massive stakes in Apple (AAPL), Occidental Petroleum (OXY), Chevron (CVX), Coca-Cola (KO), and many others. Moreover, they received $704 million in yearly dividends from Coca-Cola last year and $302 million from American Express.[4]
Buffett is also a fierce critic of financial trickery that managers often perform to beat analysts’ expectations. He warned of the dangers of manipulating the operating earnings figure, calling it “disgusting” and noting that it requires “only a deep desire to deceive”.
On Saturday, it was announced that Berkshire Hathaway's operating earnings for the fourth quarter of 2022 came to a total of $6.7 billion.[5] Profits totaled $7.285 billion in the year-earlier period, which is a decrease of 7.9% from that amount[5] Warren Buffett’s sprawling conglomerate owns businesses across the spectrum of industries and his 13-F filing showed that Berkshire’s $299 billion portfolio was invested in 49 companies in the fourth quarter of 2022, unchanged from last quarter.[6]
While everyone knows him as a brilliant stock picker and portfolio manager, Buffett also serves as a reminder of the value of being responsible and contributing to the country that has enabled our success. He concluded his letter with a reminder that “At Berkshire, there will be no finish line.[7]
0. “Warren Buffett Letter To Shareholders: Berkshire Hathaway Posts Losses — But Remains Optimistic” Forbes, 25 Feb. 2023, https://www.forbes.com/sites/tylerroush/2023/02/25/warren-buffett-letter-to-shareholders-berkshire-hathaway-sees-major-losses—but-remains-optimistic/
1. “Warren Buffett: ‘There will be no finish line' at Berkshire Hathaway” Yahoo News, 25 Feb. 2023, https://news.yahoo.com/warren-buffett-berkshire-hathaway-will-be-no-finish-line-144737030.html
2. “Highlights from Berkshire Hathaway's annual report and Warren Buffett's letter By Investing.com” Investing.com, 25 Feb. 2023, https://www.investing.com/news/stock-market-news/highlights-from-berkshire-hathaways-annual-report-and-warren-buffetts-letter-3014640
3. “Berkshire Earnings: Should Investors Buy Warren Buffett's Stock?” Yahoo! Voices, 23 Feb. 2023, https://www.yahoo.com/now/berkshire-earnings-investors-buy-warren-220810515.html
4. “Warren Buffett touts key bets, defends taxes, buybacks in annual letter” Markets Insider, 25 Feb. 2023, https://markets.businessinsider.com/news/stocks/warren-buffett-annual-shareholder-letter-coke-amex-buybacks-taxes-earnings-2023-2
5. “Berkshire Hathaway fourth-quarter operating earnings fall 8%, cash hoard swells to nearly $130 billion” CNBC, 25 Feb. 2023, https://www.cnbc.com/2023/02/25/berkshire-hathaway-brk-earnings-q4-2022.html
6. “Invest Like Warren Buffett With These ETFs” Yahoo! Voices, 23 Feb. 2023, https://www.yahoo.com/now/invest-warren-buffett-etfs-130001789.html
7. “Warren Buffett's Berkshire Hathaway is the largest investor in these 8 stocks” MarketWatch, 25 Feb. 2023, https://www.marketwatch.com/story/warren-buffets-berkshire-hathaway-is-the-largest-investor-in-these-8-stocks-1eb967c8
