At the end of 2022, Warren Buffett’s Berkshire Hathaway was the largest shareholder in eight stocks that include traditional oil companies and financial services giants.
“Berkshire now enjoys significant ownership in an unrivaled 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 SPX,
which made more than $3 billion in profits, and Berkshire was the largest shareholder in eight of these businesses: American Express AXP,
and Bank of America BAC,
among them.
Berkshire is also the dominant owner of Chevron CVX,
and Occidental Petroleum OXY,
continuing a Buffett promise in favor of fossil fuels CL00,
property even as other parts of Berkshire plunge into alternatives.
Also, Buffett’s Berkshire has the largest stake in Coca-Cola KO,
hp inc hpq,
Moody’s MCO,
and Paramount Global PARA,
Coca-Cola and American Express may be among the standout stories of Buffett’s long investment; 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 fade in importance as the flowers bloom,” Buffett wrote. “Over time, it only takes a few winners to work wonders. And, yes, it helps to start early and live to be 90, too.”
Buffett also signaled buybacks in AmEx and Apple AAPL,
(AAPL), Berkshire’s largest holding late last year, increased company ownership in each name.
“The math is not complicated: when the number of shares decreases, their interest in many of our businesses increases,” Buffett wrote. “Every little bit helps if repurchases are made at prices that increase value.”
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In Buffett’s letter to shareholders, released alongside the earnings on Saturday, the CEO also made clear his desire for the holding company to maintain a highly diverse portfolio that represents 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 BRK.A,
BRK.B,
owns 100% of rail company BNSF and 92% of BH Energy, with interests in natural gas, solar power, electricity generation and more. Both BNSF and BH Energy post profits that surpass the $3 billion mark. They are two companies that, if they went public, would be big enough to replace two current members of the S&P 500 SPX,
Buffett noted.
“In all, our 10 controlled and uncontrolled giants are leaving Berkshire
more broadly aligned with the economic future of the country than any other American company,” Buffett said in his letter. “In addition, Berkshire’s insurance operation, while conducted through many individually managed subsidiaries, is comparable in value to BNSF or BHE.”
And looking forward?
“Berkshire will always have plenty of cash and US Treasury bills along with a wide range of businesses. We will also avoid behavior that could result in any
uncomfortable cash needs at inopportune times, including unprecedented financial panics and insurance losses.”