Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A) bought back a record $24.7 billion U.S. of its own stock in 2020 as the conglomerate looked for ways to deploy $138 billon U.S. of cash on hand.
Berkshire Hathaway purchased $9 billion U.S. of its own shares in the fourth quarter, which matched a record set in the previous three-months, Buffett said Saturday in his annual letter to investors.
"Berkshire has repurchased more shares since year-end, and is likely to further reduce its share count in the future," Buffett, age 90, said in the letter. "That action increased your ownership in all of Berkshire’s businesses by 5.2% without requiring you to so much as touch your wallet."
Buffett’s letter, a closely-watched missive from one of the world’s most renowned investors, devoted large portions to the impact of repurchases, one of Berkshire’s biggest capital-deployment moves last year as it "made no sizable acquisitions."
While he avoided mentioning controversial issues in his letter, such as politics, the pandemic and race, Buffett reiterated his optimism for America, saying that progress on achieving a "more perfect union" was uneven but still moving forward.
"Never bet against America," he said.
There was a small amount of progress in paring the cash pile, which fell 5% in the fourth quarter to $138.3 billion U.S. Apple Inc. (NASDAQ:AAPL) remains one of Berkshire’s top three most-valuable assets at $120 billion U.S., Buffett said. The technology company has said it intends to repurchase its own shares as well.
Swings in Berkshire’s massive $281.2-billion U.S. stock portfolio feed into the company’s net income because of an accounting technicality. That drove the figure up 23% to $35.8 billion U.S. in the fourth quarter from a year earlier.
Berkshire’s Class A shares gained roughly 2.4% last year, falling short of the 16% increase in the S&P 500 index, which Buffett says he measures himself against and tries to beat.
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