Berkshire Hathaway Annual Revelations and Buffett's Blunt Protectionism Critique
U.S. faces potential disaster from trade tariffs, warns Buffet
At the 2025 Berkshire Hathaway gathering held on May 3rd, management sound off the firm's Q1 results, revealing a market cap of a whopping $1.2 trillion. Get this - the company's cash reserves kicked up over $10 billion, reaching a mammoth $347.7 billion, all while Warren Buffet kept his cool on the stock market.
Piling up the Green and Avoiding Market Turmoil
The eyecatching increase in cash reserves came as Buffet sold off stocks like Apple and Bank of America in 2024, enabling Berkshire Hathaway to dodge hefty losses caused by Trump's tariffs. Despite the big fall in quarterly operating profits (14% down from $11.22 bil to $9.64 bil), the company's operating profits from insurance underwriting dropped by a whopping 49% and its railroad profits grew by a modest 6.2%.
The total net income plummeted by a hefty 64%, but the company's insurance float remained stable at $173 billion. You won't believe this: Berkshire was a net seller of stocks for the tenth consecutive quarter, buying $3.18 billion in shares and flipping $4.68 billion worth! The Q1 loss from stock market transactions reached a jaw-dropping $5.04 bil compared to a profit of $1.48 bil the year before. But remember, this figure is partly attributed to open positions where the actual profit or loss hasn't been realized yet.
The Nasty Republic of Protectionism
At the annual meeting, Buffett delivered a bitter rebuke of protectionism, warning it could ignite destructive consequences toe-to-toe with economic warfare. He passionately argued that trade shouldn't be weaponized, and dubbed tariffs an "act of war" likely to lead to disastrous outcomes.
"Trade should not be a weapon," he repeated, staunchly advocating for free trade as a driver of shared growth. Buffett fears that cozying up to a global 7.5 billion population could be hazardous, saying:
*In my view, it's a big mistake when you have 7.5 billion people who don't feel very good about you, and 300 million say how well we're doing. - I don't think that's right or smart.
Warren Buffet, the company's chairman, will hang up his handbag as CEO at year's end, planning to hand over the reins to Greg Abel, current executive director of energy.
[1] - Don't kick the hornet's nest: why tariffs are dangerous[2] - Weaponization of trade: exploring the collateral damage[3] - Buffett's plea for global trade cooperation[4] - A walk down memory lane: Smoot-Hawley, a decades-old lesson[5] - The geopolitical price of protectionism: a case study.
- Despite selling off stocks like Apple and Bank of America in 2024, Berkshire Hathaway, under Warren Buffet's management, managed to avoid hefty losses caused by Trump's tariffs, increasing its cash reserves by over $10 billion.
- In the face of a 64% plunge in total net income, Berkshire Hathaway's insurance float remained stable at $173 billion, demonstrating the benefits of diversifying in the finance and business sector.
- At the 2025 Berkshire Hathaway gathering, Warren Buffett, the company's chairman, criticized protectionism, labeling it as an "act of war" that could lead to disastrous outcomes in the realm of politics and general-news.
- As Buffet prepares to step down as CEO at year's end, he worries about the potential negative impacts of a hostile global population, stating, "I don't think that's right or smart."
- The shifting of power within Berkshire Hathaway will see Greg Abel, current executive director of energy, taking over as CEO, making headlines in the finance, business, and technology sectors.
