Warren Buffett doesn’t trust pundits and more takeaways from his annual note to shareholders

Buffett opened his note with a tribute to Charlie Munger, the longtime vice chair of Berkshire who had a lot of folksy wit that died last November, crediting him with being the architect of Buffett’s business.

Buffett went on to reveal that his insurance conglomerate made a record $96 billion in 2023, though some key portfolios like its utilities and BNSF railroad divisions didn’t perform so hot. He also gave a note on succession, writing that Greg Abel, who runs all non-insurance operations for Berkshire, “in all respects is ready to be CEO of Berkshire tomorrow.”

We pulled out four other standout quotes from Buffett’s note that illustrated where the Oracle $ORCL of Omaha’s head is at right now.

Don’t trust the pundits

Speaking of his sister Bertie: “She is sensible — very sensible — instinctively knowing that pundits should always be ignored. After all, if she could reliably predict tomorrow’s winners, would she freely share her valuable insights and thereby increase competitive buying? That would be like finding gold and then handing a map to the neighbors showing its location.” [emphasis in original].

The significance of capital gains

“Make no mistake about the significance of capital gains: I expect them to be a very important component of Berkshire’s value accretion during the decades ahead.”

The power of Coca-Cola and American Express

“Both AMEX and Coke will almost certainly increase their dividends in 2024 —about 16% in the case of AMEX — and we will most certainly leave our holdings untouched throughout the year.”

The impact of climate change on business

“At Berkshire, we have made a best estimate for the amount of losses that have occurred. These costs arose from forest fires, whose frequency and intensity have increased — and will likely continue to increase — if convective storms become more frequent. It will be many years until we know the final tally from [Berkshire Hathaway Energy]’s forest-fire losses and can intelligently make decisions about the desirability of future investments in vulnerable western states.”