Warren Buffett’s annual letter to shareholders of his Berkshire Hathaway conglomerate was issued today, with the business tycoon writing on the state of the economy and offering encouraging words for investors.
“Today, many people forge similar miracles throughout the world, creating a spread of prosperity that benefits all of humanity,” Buffett wrote. “In its brief 232 years of existence, however, there has been no incubator for unleashing human potential like America. Despite some severe interruptions, our country’s economic progress has been breathtaking. Beyond that, we retain our constitutional aspiration of becoming “a more perfect union.” Progress on that front has been slow, uneven and often discouraging. We have, however, moved forward and will continue to do so. Our unwavering conclusion: Never bet against America.”
The letter also discussed Buffett’s ownership of Apple shares. Apple is now the second most valuable piece of BH’s portfolio, behind his BNSF railroad holdings.
“Berkshire’s investment in Apple vividly illustrates the power of repurchases. We began buying Apple stock late in 2016 and by early July 2018, owned slightly more than one billion Apple shares (split-adjusted),” he wrote. “Saying that, I’m referencing the investment held in Berkshire’s general account and am excluding a very small and separately-managed holding of Apple shares that was subsequently sold. When we finished our purchases in mid-2018, Berkshire’s general account owned 5.2% of Apple.”
Berkshire earned $42.5 billion in 2020, according to generally accepted accounting principles, the letter stated. The four components of that figure are $21.9 billion of operating earnings, $4.9 billion of realized capital gains, a $26.7 billion gain from an increase in the amount of net unrealized capital gains that exist in the stocks the conglomerate holds and an $11 billion loss from a write-down in the value of a few subsidiary and affiliate businesses that BH owns.
BH’s annual shareholders meeting is set for May 1 in a virtual format.