NEW YORK (Reuters) – Warren Buffett on Saturday forcefully defended Berkshire Hathaway Inc’s (BRKa.N) decision to invest heavily in stocks of companies such as Apple Inc (AAPL.O) as he labors through a four-year drought since his last major acquisition of a company.
Buffett, 89, also used his annual letter to Berkshire shareholders to assure they should not worry about the future of the company, which is “100% prepared” for when he and 96-year-old Vice Chairman Charlie Munger are no longer around.
Berkshire also posted record full-year earnings of $81.42 billion, nearly twice the prior high from 2017, boosted by unrealized gains from its stock investments. Operating profit, however, fell 3% to $23.97 billion.
The Omaha, Nebraska-based conglomerate ended the year with a $128 billion cash hoard, after repurchasing $2.2 billion of stock in the fourth quarter and $5 billion in 2019.
“I do think it’s on the right path,” said James Armstrong, president of Henry H. Armstrong Associates in Pittsburgh, which invests one-fourth of its assets in Berkshire. “Its balance sheet is exactly the type of toolkit you’d like to leave a successor.”
Berkshire has more than 90 units employing 391,539 people, including the BNSF railroad, Geico car insurer, Dairy Queen ice cream and See’s candies; clothing and jewelry companies, and namesake utility and real estate brokerage businesses.
Berkshire ended the year with a $128 billion cash hoard, having made no major acquisitions since paying $32.1 billion in January 2016 for aircraft parts maker Precision Castparts, and Buffett lamented his inability to find big companies to buy.