What Warren Buffett says about giving and the market
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Warren Buffett, CEO of Berkshire Hathaway, released a Thanksgiving letter Monday, as Greg Abel is set to take over the reins at the conglomerate.
Why it matters: Investors monitor Buffett's annual letter religiously for insight into the market, and this will be the one of the last opportunities to do that as "Oracle of Omaha" prepares to retire.
What they're saying: "As Thanksgiving approaches, I'm grateful and surprised by my luck in being alive at 95," Buffett wrote.
Zoom in: Buffett said only one thing about the market.
- In a section about how he feels good and is in the office five days a week at 95, he added that he's occasionally approached with good ideas, but "because of Berkshire's size and because of market levels, ideas are few, — but not zero."
- This may help explain the amount of cash Berkshire has kept on the sidelines ($382 billion as of the third quarter), much to the concern of investors who look to Buffett to understand where market opportunities lie.
- Buffett said he's accelerating the pace of his "lifetime gifts" to his three children's foundations to "improve the probability" that they will be the ones to "dispose of" his entire estate — rather than leaving that responsibility to alternate trustees after they're gone.
Between the lines: Buffett reflected on his luck multiple times in the letter, writing "I was born in 1930 healthy, reasonably intelligent, white, male and in America. Wow! Thank you, Lady Luck."
Zoom out: Buffett isn't just revered for how he runs Berkshire.
- He's widely considered the greatest investor of all time, and his annual letters often include lessons for other investors.
- These lessons include adages that have become common on Wall Street: "Be fearful when others are greedy and greedy when others are fearful," for example.
- He included life lessons in his latest letter as well, saying not to dwell on mistakes and to make sure you live life in accordance with what you'd most want your obituary to reflect.
Follow the money: He's also popularized low-cost index funds. In his will, he directed his trustee to invest 90% of his money into a low-cost index fund tracking the S&P 500 and 10% into government bonds.
- ""I believe the trust's long-term results from this policy will be superior to those attained by most investors," he wrote.
What we're watching: Greg Abel, a vice chairman at Berkshire, is set to take over for Buffett at the end of this year.
- Abel will take over the annual letter to shareholders as part of his CEO duties, according to the Wall Street Journal.
- Berkshire's stock is up about 10% year-to-date, trailing the broader market after a 28% rally in 2024.
Editor's note: This story has been updated with additional details from Warren Buffett's letter.
