Berkshire Hathaway (BRK  ) reported Q4 earnings that were better than expected and sent the stock more than 4% higher. Berkshire's operating income gives insight into the performance of the various businesses that it owns that are concentrated in the consumer spending, industrial, and energy segments. And, it notably achieved a record high indicating that the economy is quite strong despite the various headwinds.

We also see the performance of Berkshire's investment portfolio which has also done well, especially with recent strength in cyclical stocks and financials. In the shareholder letter, Buffett complained that asset prices were too high and that he wasn't finding anything attractively priced to buy. Further, he said that many companies were using shady accounting practices to inflate earnings, summing it up as "Speaking less politely, I would say that bull markets breed bloviated bull...."

Of course, the one exception to this is Berkshire stock which he keeps enthusiastically buying and reflects his confidence in it. Over the last 2 years, Buffett has bought $51.7 billion of stock and still has $146 billion in cash. Ideally, he says Berkshire would have between $20 to $30 billion of cash. However, Buffett has slowed his buying of Berkshire in recent months as the price rose, indicating he may think it's closer to fully priced.

In terms of the overall business, Buffett said there are 4 giants - his $160 billion Apple (AAPL  ) stake, Burlington Northern, Berkshire Energy, and the cluster of insurers they own. Apple has been a long-term outperformer while rails and energy stocks are thriving.

In Q4, the company's operating income increased by 45% to $7.3 billion. For the full year, operating income was $27.5 billion, a 25% increase from last year. Earnings from the railroad, utilities, and energy business jumped 12.3% to $2.2 billion. The insurance-underwriting business earned $372 million after losing $299 million in the fourth quarter of 2020.