Warren Buffett’s Berkshire Hathaway Inc. has taken a more cautious yet strategic approach to deploying its massive cash reserves, opting for what Buffett described as a “mildly attractive” method—record-breaking buybacks—rather than the high-profile acquisitions that have marked his career. In 2021, the conglomerate repurchased a staggering $27.1 billion of its own shares, setting a new high since Buffett’s push into buybacks began in 2018. The move was part of a broader effort to manage the nearly $147 billion cash hoard accumulated during a year when other investment options were deemed less appealing.

In his annual letter to shareholders, Buffett acknowledged the challenges of finding suitable acquisitions amid inflated valuations and low interest rates. He revealed that Berkshire’s leadership has found little to excite them in terms of new deals, a sentiment that reflects the current landscape for dealmaking, where high prices for quality businesses are deterring the company from making major acquisitions. Despite the lack of deals, Buffett remained focused on increasing the intrinsic value of Berkshire’s shares, a task he has prioritized throughout his 57-year tenure as CEO.

The company’s aggressive buyback strategy helped to chip away at its cash reserves, which had become an increasing point of concern for Buffett and his partner, Charlie Munger. The buybacks were particularly pronounced in the latter part of 2021, with $6.9 billion of stock repurchased in the final quarter alone. Berkshire continued the buyback trend into 2022, with an additional $1.2 billion spent in the first few months of the year.

While Buffett noted that the company’s shareholder base limits the scope for opportunistic buybacks, he emphasized his preference for long-term investors, whose steady ownership limits volatility but also curbs the extent to which the company can repurchase stock. Despite this, Buffett reiterated that enhancing shareholder value remained the company’s top priority.

Berkshire’s earnings for the fourth quarter of 2021 reflected this steady approach, with operating profits climbing 45% to $7.29 billion, driven by strong performances from its railroad and utility businesses. Meanwhile, net income grew 10.6%, bolstered by fluctuations in Berkshire’s sizable $350.7 billion stock portfolio. The company ended the year with a cash pile of $146.7 billion, which, while significant, was slightly below the $149.2 billion record set earlier in 2021.

Buffett’s letter also highlighted Berkshire’s core investments, particularly its stake in Apple Inc., which has become one of the conglomerate’s largest holdings. Buffett praised Apple’s CEO, Tim Cook, for his leadership and for focusing on creating value for Apple’s users while benefiting shareholders as well.

Looking ahead, Buffett’s plans for succession have been a focal point in recent years, with Greg Abel being named the likely successor when Buffett eventually steps down. However, there was little mention of this transition in the letter, with the focus instead on the company’s ongoing strategy and financial performance. Berkshire also announced plans to hold its annual shareholder meeting in person this year in Omaha, Nebraska, marking a return to tradition after the pandemic forced the company to hold virtual meetings in recent years.

In conclusion, while the high-profile acquisitions that have become synonymous with Buffett’s reputation may be on hold, Berkshire Hathaway’s commitment to shareholder value, through buybacks and strong operational performance, remains steadfast.