As 2022 wrapped, Warren Buffett’s Berkshire Hathaway was the largest shareholder of eight stocks that include traditional oil companies and financial-services giants.
“Berkshire now enjoys major ownership in an unmatched collection of huge and diversified businesses,” Buffett, 92, wrote in his annual letter.
Buffett noted that last year there were 128 companies in the S&P 500
that earned more than $3 billion in profits — and Berkshire was the largest shareholder in eight of these businesses: American Express
and Bank of America
Berkshire is also the dominant holder of Chevron
and Occidental Petroleum
continuing a Buffett pledge in favor of fossil-fuel
ownership even as other parts of Berkshire dips into alternatives.
Further, Buffett’s Berkshire holds the largest stake in Coca-Cola
and Paramount Global
Coca-Cola and American Express may be among the standout stories for Buffett’s long investing run; he spent $1.3 billion on each stake some 30 years ago, and Berkshire’s holdings are now worth $25 billion and $22 billion, respectively.
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“The lesson for investors: The weeds wither away in significance as the flowers bloom,” Buffett wrote. “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.”
Buffett also noted buybacks at AmEx and Apple
(AAPL) — Berkshire’s largest position at the end of last year — increased the company’s ownership in each name.
“The math isn’t complicated: When the share count goes down, your interest in our many businesses goes up,” Buffett wrote. “Every small bit helps if repurchases are made at value-accretive prices.”
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In Buffett’s shareholder letter, released alongside earnings on Saturday, the CEO also made clear his desire for the holding company to maintain a vastly varied portfolio representing a mega empire even under eventual new leadership.
Greg Abel, currently CEO of Berkshire Hathaway Energy, is expected to succeed Buffett as CEO.
“At Berkshire, there will be no finish line,” Buffett wrote.
In addition to those eight, Berkshire
owns 100% of railroad BNSF and 92% of BH Energy, with interests in natural gas, solar, electricity generation and more. Both BNSF and BH Energy log earnings that exceed the $3 billion mark. They are two companies that if publicly-traded, would be large enough to replace two present members of the S&P 500
“All told, our 10 controlled and non-controlled behemoths leave Berkshire
more broadly aligned with the country’s economic future than is the case at any other U.S. company,” Buffett said in his letter. “In addition, Berkshire’s insurance operation, though conducted through many individually-managed subsidiaries, has a value comparable to BNSF or BHE.”
And looking ahead?
“Berkshire will always hold a boatload of cash and U.S. Treasury bills along with a wide array of businesses. We will also avoid behavior that could result in any
uncomfortable cash needs at inconvenient times, including financial panics and unprecedented insurance losses.”