Warren Buffett’s 2025 Letter: Confidence in Stocks, Leadership Stability, and Global Growth

Warren Buffett’s annual letter to Berkshire Hathaway shareholders, released on February 22, 2025, once again provided valuable insights into the company’s investment philosophy and future strategy. In this year’s letter, Buffett reinforced his confidence in stocks, expressed strong support for his successor Greg Abel, and outlined Berkshire’s growing focus on international investments, particularly in Japan.

Confidence in Stocks Over Cash

Despite Berkshire Hathaway holding substantial cash reserves, Buffett made it clear that he still favors equities over cash for long-term gains. He emphasized that while maintaining liquidity is important, investing in strong businesses remains the best way to generate value for shareholders.

“Equities offer far greater long-term benefits than holding idle cash,” Buffett stated, underscoring his belief in the resilience of well-chosen stocks. This philosophy reflects his long-standing approach—investing in fundamentally sound companies and allowing the power of compounding to work over time.

Greg Abel: A Strong Successor

A significant part of Buffett’s letter was dedicated to Greg Abel, who is set to take the reins of Berkshire Hathaway when Buffett steps down. Abel, currently overseeing the company’s non-insurance operations, received high praise from Buffett, who compared him to the late Charlie Munger—a remarkable endorsement given Munger’s profound influence on Berkshire’s success.

“Greg has a steady hand and a sharp understanding of what makes great investments,” Buffett wrote. His words signal confidence that Berkshire’s future remains secure under Abel’s leadership. Investors can take comfort in knowing that Berkshire Hathaway’s fundamental investment principles will continue under a capable and experienced leader.

Expanding Investments in Japan

One of the more notable announcements in Buffett’s letter was Berkshire Hathaway’s increased investments in Japan. Buffett revealed that the company has raised its stake in five major Japanese trading firms—Mitsubishi Corp., Mitsui & Co., Itochu Corp., Marubeni Corp., and Sumitomo Corp.—to 7.4%.

This expansion builds upon Berkshire’s initial investments in these companies, which began in 2020. Buffett has long admired these firms for their strong business models and attractive valuations. His commitment to expanding Berkshire’s stake in Japan underscores his confidence in the long-term prospects of these businesses and the Japanese market.

Commitment to Value Investing

Throughout his letter, Buffett stayed true to his core philosophy—investing in companies with strong fundamentals, consistent earnings, and competitive advantages. His approach rejects speculation in favor of businesses that deliver sustainable value.

Buffett’s emphasis on quality investments over market trends serves as a reminder for investors to focus on long-term strategies rather than chasing short-term fluctuations. His disciplined approach has allowed Berkshire Hathaway to achieve remarkable success over the decades, and this letter reaffirms that commitment.

Looking Forward

Buffett’s 2025 letter makes it clear that Berkshire Hathaway will continue to prioritize equities, maintain its strong investment principles, and prepare for a smooth leadership transition under Greg Abel. The increasing focus on Japanese trading firms also signals a willingness to explore international opportunities for sustained growth.

As Buffett has famously said, “The stock market is designed to transfer money from the Active to the Patient.” His latest letter reinforces this message, reminding investors that patience, discipline, and a focus on strong fundamentals remain the keys to long-term success. With Abel taking on a larger leadership role, Berkshire Hathaway appears well-positioned to uphold Buffett’s legendary investment approach for years to come.