NEW YORK – The billionaire finance guru Warren Buffett, who complained recently that he did not know where to put his money, said yesterday he has invested billions of dollars so far this year, even as he took jabs at Wall Street.
Buffett, 91, took questions for five hours at the much-anticipated annual shareholder meeting of his holding company Berkshire Hathaway in Omaha, Nebraska, its first in-person gathering since before the Covid-19 pandemic. He did so along with his right-hand man Charlie Munger, who is 98.
The event, dubbed a “Woodstock for capitalists,” draws thousands of shareholders from around the world to hear the investment wisdom of Buffett, revered among investors as the “Oracle of Omaha.”
As markets vacillated since the start of the year, Berkshire Hathaway spotted bargains and bought shares worth more than US$51 billion (RM222 billion) from January through March.
For example, it raised its investment in oil company Chevron from US$4.5 billion in late 2021 to US$26 billion in late March. Chevron is now among the top four of the holding’s investments, along with American Express, Apple and Bank of America. Berkshire Hathaway also acquired a 14% stake in Occidental Petroleum.
It bought an 11% stake in computer maker HP, as well, and increased its share of video game maker Activision – which is being acquired by Microsoft – to 9.5%.
Berkshire sold shares worth US$10 billion over the same January to March period.
Bottom line, Berkshire’s war chest of cash on hand dropped from US$147 billion to US$106 billion.
But Buffett said investors need not worry because Berkshire “will always have a lot of cash” to weather hard times.
Joining him and Munger on the podium were vice president Greg Abel – at 59, he is Buffett’s designated successor – and company executive Ajit Jain.
Profits down
Buffett took some pot shots at Wall Street, saying, “They make a lot more money when people are gambling than when they are investing.”
He said the fact that his company acquired 14% of Occidental Petroleum in just two weeks shows that “overwhelmingly large companies in America, they became poker chips.”
Of cryptocurrencies, he said: “Whether it goes up or down in the next year or five or 10 years, I don’t know. But the one thing I’m pretty sure of is it doesn’t produce anything.”
The question of succession at Berkshire Hathaway is a big one because of the age of Buffett and Munger, but neither said anything about retiring.
Before the meeting, Berkshire said its net profit plunged by 53% in the first quarter due to a drop in the paper value of its investments.
Berkshire listed net profits of US$5.5 billion, down sharply from the US$11.7 billion of the year-earlier period.
Operating profits of companies owned by the conglomerate – ranging from insurance companies to energy providers and even frozen desserts – remained essentially unchanged, at US$7.04 billion.
A drop in profits from insurance companies was compensated by profits from rail lines, energy firms, manufacturing, services and retail sales, said a statement from Berkshire Hathaway.
But the value of its investments, which can be volatile from one quarter to the next, plunged amid the year’s market weakness, leading to a paper loss of US$1.58 billion.
Buffett regularly advises his shareholders to ignore quarterly fluctuations, whether positive or negative.
The value of Berkshire shares themselves has held up well -- rising 7% since the beginning of the year, while the S&P 500 index, representing the 500 biggest Wall Street-traded firms, lost more than 13%. – AFP, May 1, 2022
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