Understanding Buffett's "Letter to Shareholders" and Asset Allocation with One Picture While staying up late reading Buffett's "Letter to Shareholders" this year, I also made a comparison chart of Buffett's stock asset allocation adjustments (early 24th vs. early 25th) and shared it with everyone. Add a few annotations that cannot be written in the picture: one ️⃣ Those who often track Buffett's holdings may find that the "proportion of holdings" and "total market value of holdings" in the chart are different from the charts posted by other institutions/media/bloggers a few days ago. This is because a few days ago, only the data of F-13 Filing was available (released on 2/14), which only includes stocks listed in the United States, so it is not comprehensive enough (for example, the Japanese trading company stocks that Buffett has focused on buying in recent years are not reflected in it). 🔴 To comprehensively and accurately reflect Buffett's global equity allocation, it is necessary to refer to the annual report and shareholder letter released today - the "timeliness" (&accuracy) of this chart in the notes is here. two ️⃣ In order to reflect the ratio of "cash like" assets such as Buffett's reduction of stock for cash and increase of treasury bond bonds in the latest year, the figure also shows the change of Berkshire Hathaway's net debt/net cash. 🔴 "Net debt"=interest bearing debt - cash and equivalents - treasury bond, corporate bonds, etc. 🔴 Net cash "is defined as the negative value of" net liabilities ". 🔴 The highlights of this year's' Letter to Shareholders': one ️⃣ Repeating the concept of "value investing" from multiple perspectives as always Still criticizing Wall Street's emphasis on EBITDA operations as usual two ️⃣ This year's commemoration of Forest River CEO Pete Liegl's opportunity was to talk about the "way of identifying/employing people" (business talent does not depend on education). Emphasize once again the important role of discovering "good companies" and "competent managers" in executing value investments. three ️⃣ In 2024, large scale reduction of holdings and cash out have accumulated rich reserves of cash (high liquidity assets such as treasury bond). In this context, the 'Letter to Shareholders' emphasizes that' cash will never be preferred over equity investments'. 🔴 Does it make people wonder if Mr. Ba feels that there may be an (excessive) adjustment in the US stock market and is preparing to buy shares in some previously favored companies. four ️⃣ Mentioning investment in the five major Japanese trading companies once again. The plan is to continue increasing the shareholding ratio (currently around 9%), implying that the shareholding ratio may exceed 10% in the future. five ️⃣ Repeatedly mentioning (and promoting) Greg Abel, the intention of "handing over the shift" is even more obvious. It is said that Mr. Ba's' Letter to Shareholders' is getting shorter year by year. This year's letter contains multiple hints of "handing over the shift to" Greg. It's possible that next year's shareholder letter will be co written by both of them, and in the future, Greg Abel will send it Let's take a look and cherish it