Warren Buffett’s Trillion-Dollar Advice for Uncle Sam 💰🇺🇸

7 min readFeb 23, 2025

A Master Class in Economic Wisdom

Poetic, compassionate, and razor-sharp — Warren Buffett delivers words of wisdom to the U.S. administration in Berkshire Hathaway’s Annual Report [Here]. Of course, for the fans of the Oracle of Omaha, these insights are more than just financial advice — they are a masterclass in economic foresight and common sense.

Buffett wraps up his letter with a direct message to the U.S. government:

“So thank you, Uncle Sam”, writes Buffett, “Someday your nieces and nephews at Berkshire hope to send you even larger payments than we did in 2024. Spend it wisely.
Take care of the many who, for no fault of their own, get the short straws in life. They deserve better.
And never forget that we need you to maintain a stable currency and that result requires both wisdom and vigilance on your part.”
“I thought honestly in a very subtle way that was a powerful message,” said CFRA Research analyst Cathy Seifert.

Despite capitalism’s imperfections, Buffett remains bullish on America’s economic resilience, crediting it for the country’s extraordinary progress over 235 years.

Buffett writes “From a base of only four million people — and despite a brutal internal war early on, pitting one American against another — America changed the world in the blink of a celestial eye.”

Billion-Dollar Advice? Make That Trillion-Dollar Advice! 💵

As of today, BRK-A has a Market Cap of $1T (yep, T and in Trillion!) My initial title for this blog was “Billion Dollar Advice”, but honestly “Trillion Dollar Advice” seems far more fitting !!

Buffett’s Key Insights: A Distilled Dose of Wisdom 📖

To help you navigate through the 150 pages (13 page Chair’s letter + various 10-Ks, A-1 and A-2), here’s a top 10 curated summary of Buffett’s wisdom !!

🔟 Final Thoughts: Buffett’s Legacy Lives On:

Buffett’s 2024 letter is packed with wisdom, humor, and timeless investment lessons. His message remains clear:

💡 Acknowledge mistakes. Stay patient. Invest for the long haul
💰 Avoid risky spending. Hoard cash until great opportunities arise
🇺🇸 America’s best days are still ahead — if managed wisely
🏫 Never look at where a candidate has gone to school. You will see them from all walks of life

The Special Letters — from Charlie (Vice Chairman’s Thoughts — Past and Future) and from Warren (Berkshire — Past, Present and Future) are also a good additional read !

1️⃣ Introduction: The Purpose of the Annual Report

Warren Buffett opens the letter by emphasizing that Berkshire Hathaway’s annual report isn’t just a legal obligation but a means of transparent communication with shareholders.

His philosophy is to provide the type of insight he would expect if the roles were reversed — if shareholders were the CEO and Buffett was a passive investor trusting them with his savings.

2️⃣ Mistakes — Yes, We Make Them at Berkshire

A beautiful section, you should read it ! I will give couple of quotes

Buffett candidly discusses his history of mistakes, particularly in capital allocation and personnel decisions. He acknowledges that errors in evaluating businesses and managers have been inevitable, but the most important lesson, as his longtime partner Charlie Munger taught him, is to take swift corrective action rather than “thumb-sucking” and delaying necessary decisions.

Buffett writes “During the 2019–23 period, I have used the words “mistake” or “error” 16 times in my letters to you. Many other huge companies have never used either word over that span. Amazon, I should acknowledge, made some brutally candid observations in its 2021 letter. Elsewhere, it has generally been happy talk and pictures”

Buffett warns against the illusion of managerial perfection:

He adds candidly “That taboo (“mistake” or “wrong” were forbidden words at board meetings or analyst calls), implying managerial perfection, always made me nervous (though, at times, there could be legal issues that make limited discussion advisable. We live in a very litigious society)”

Key Lesson? Don’t sugarcoat mistakes. Own them. Fix them. Move forward.

3️⃣ Berkshire’s Record-Breaking Tax Payments 💰

In a stunning milestone, Berkshire Hathaway became the largest corporate taxpayer in U.S. history, paying $26.8 billion in federal income taxes in 2024 — about 5% of total U.S. corporate tax receipts.

To illustrate the magnitude of Berkshire’s tax contributions, Buffett explains, with humor and pride “If Berkshire had sent the Treasury a $1 million check every 20 minutes throughout all of 2024 — visualize 366 days and nights because 2024 was a leap year — we still would have owed the federal government a significant sum at yearend. Indeed, it would be well into January before the Treasury would tell us that we could take a short breather, get some sleep, and prepare for our 2025 tax payments !”

Why So Much? Berkshire reinvests profits instead of paying dividends, compounding its tax burden over time. Lesson? Compounding isn’t just for investments — it applies to taxes too !

4️⃣ Will You Be Getting the 60 Years of BRK Book? 📚

Buffett invites shareholders to Berkshire’s annual meeting on May 3rd, 2025, promising engaging discussions and a showcase of Berkshire-owned brands. This year, a special edition book, “60 Years of Berkshire Hathaway”, will be available.

I was able to get a copy of the previous edition - “Berkshire Hathaway Inc.: Celebrating 50 Years of a Profitable Partnership” ! I am keeping an eye on the book shops checking for the availability of the 60 Years book — probably will be in the market after May 3rd.
If you’re a Buffett fan, this one’s a must-read !

5️⃣ Cash Position — Waiting for the right opportunity ?

Berkshire now holds $334 billion cash, double the $168 billion cash Berkshire held a year ago.

With its massive cash reserves, Berkshire could acquire nearly any US company outside of the biggest giants.

Market experts suggest that Buffett’s reluctance to deploy cash reflects high valuations rather than a negative market outlook [1]
He writes “Paper money can see its value evaporate if fiscal folly prevails. In some countries, this reckless practice has become habitual, and, in our country’s short history, the U.S. has come close to the edge!”
Buffett himself addressed this issue [5] during last annual general meeting (when they had $182B in cash !) “We’d love to spend it, but we won’t spend it unless we think we’re doing something that has very little risk and can make us a lot of money.” He added, “We only swing at pitches we like. It isn’t like I’ve got a hunger strike or something like that going on. It’s just that things aren’t attractive.”[3]
Another factor contributing to the cash buildup is the temporary halt in stock buybacks in the third quarter. The company maintains that buybacks only occur when Buffett believes the stock is trading below its intrinsic value. [5]
But there are other voices as well — Investor Bill Smead of Smead Capital Management said Buffett’s actions show he’s actually “bearish as hell but won’t admit it”. Buffett likely thinks the stock market is terribly expensive.

6️⃣ Berkshire’s Expanding Footprint in Japan 🇯🇵

Berkshire has been steadily increasing its investments in five major Japanese trading companies (Itochu, Marubeni, Mitsubishi, Mitsui, Sumitomo). Initially purchased in 2019 because of their low valuations, Buffett now sees them as long-term holdings.

These companies align with Berkshire’s investment philosophy i.e., Dividend growth, Share buybacks at sensible prices and Conservative executive compensation.

Berkshire’s Japanese investments had a market value of $23.5 billion at year-end, significantly above their $13.8 billion cost basis.

Berkshire’s holding has been keeping below the 10% — as they approach the loimit the five companies have relaxed the celing and so Berkshire would increase it’s holding.

Buffett highlights the company’s use of yen-denominated debt to hedge currency risk.

7️⃣ CEO Succession: Greg Abel Takes the Helm

Buffett, now 94, acknowledges that his time leading Berkshire Hathaway is nearing an end, and he reaffirms that Greg Abel will succeed him as CEO. He expresses confidence that Abel shares Berkshire’s values and commitment to honest reporting. He warns against the dangers of companies fooling their shareholders, which can lead to management deceiving itself.

Buffet of CEO selections: “I never look at where a candidate has gone to school. Never!”

8️⃣ Investment Strategy: Controlled vs. Marketable Equities

Buffett discusses Berkshire’s two primary investment approaches viz. Controlling entire businesses (e.g., GEICO, BNSF, Berkshire Hathaway Energy) and Owning minority stakes in high-quality public companies (e.g., Apple, American Express, Coca-Cola, Moody’s).

While direct ownership offers more control, Buffett acknowledges that great companies are rarely available for outright purchase. Instead, Berkshire takes advantage of Wall Street’s occasional mispricing of publicly traded businesses. (hint, hint, hint … if you see Buffett buying shares, it is an indication of an arbitrage opportunity 💱)

9️⃣ Insurance: Berkshire’s Underrated Cash Machine

Property-Casualty (P/C) Insurance remains Berkshire’s financial backbone, generating $32 billion in after-tax underwriting profits over the last 20 years.
Buffett warns about mispricing risk:

“With long-tail insurance, a company may report large but fictitious profits for years — even decades — before realizing it’s been losing money all along.”

His biggest concern? Climate change.

“Convective storms are increasing, and climate change may have been announcing its arrival.”

Berkshire prices policies conservatively, ensuring they never chase market share at the expense of profitability.

Well, That’s all Folks !

Did this blog inspire you to dive into Buffett’s work ? Let me know your thoughts! 🚀