Good morning! Today we’re covering Warren Buffett’s latest annual letter and the record cash war chest he continues to build. First time reading? Join 190,000 self-directed investors gaining an edge every morning. Sign up here. 

🎯Reader note: I’ll be reporting all week from Bitcoin Investor Week in New York City (come say hi!), meeting with the most prominent decision makers in the space. Look out for dispatches from the conference, in addition to our regular programming.

New wisdom from old Buffett

Sometimes I perk up when I realize I’ve published my newsletter every day for nearly a year, but then I remember Warren Buffett is currently riding a streak of six decades. 

With characteristic wit, wisdom and a measured candor, the 94-year-old Berkshire Hathaway chief released his latest shareholder letter on Saturday.

In it, he touched on everything from his record cash pile and optimism for US businesses to succession plans and building investment in Japan.

Berkshire ended last year as a net-seller of equities for the ninth consecutive quarter. Its cash reserves ballooned to $334.2 billion, up from $325.2 billion in the third quarter and $167.6 billion the year before.

Plus, for the second quarter in a row, Berkshire did not repurchase any of its own stock, which suggests Buffett may believe his own shares are a bit pricey. 

Buffett, however, reassured shareholders that he’s bullish long-term on good American businesses. 

“Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities,” Buffett said. “That preference won’t change.”

“Berkshire shareholders can rest assured that we will forever deploy a substantial majority of their money in equities,” he continued, adding that good businesses and talented individuals will “usually find a way to cope with monetary instability.”

Other notable details from Berkshire’s report, which encompasses earnings from all of its wholly owned businesses: 

And Buffett’s take on those numbers: 

While the company’s Class A and Class B shares have lagged the S&P 500 over the last 12 months, zooming out tells a better story.

Since 1965, Berkshire has returned a compounded annual gain of 19.9% to its shareholders, nearly double the S&P 500’s 10.4%. 

The gap in overall performance is even more stark. Over the last six decades, Berkshire’s market value increased 5.5 million percent through the end of 2024, while the S&P 500 has gained 39,054%.

I highly recommend reading Buffett’s full letter here.  

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Elsewhere:

📉 The Dow is coming off its worst day of 2025. Each of the three major US benchmarks tanked on Friday after a volley of economic raised concerns about a coming slowdown. Consumer sentiment declined, inflation expectations spiked, and the US services purchasing managers’ index into contraction territory.

📨 Berkshire Hathaway just paid the most taxes in history. The conglomerate paid the US government $26.8 billion last year, though much of that was tied to the sale of its Apple stock holdings. In Buffett’s words: “[Berkshire'] paid far more in corporate income tax than the US government had ever received from any company — even the American tech titans that commanded market values in the trillions.” (Barron’s)

🍻 Want more financial news, but after the closing bell? Thousands of readers trust Brew Markets for their end-of-day analysis. I’ll handle your morning dispatch, and you can wrap up your afternoons with Brew Markets from Morning Brew — sign up free.

🏦 The Fed’s preferred inflation gauge is expected to cool. Policymakers will remain cautious regardless what it reads, though economists expect the core personal consumption expenditures index to climb 2.6% in January. That would mark the slowest pace since June. (Bloomberg)

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