Warren Buffett invests a lot of Berkshire Hathaway money

Josh Funk, The Associated Press

OMAHA, Neb. – Warren Buffett briefly explained to Berkshire Hathaway shareholders that he spent more than $ 50 billion earlier this year and tried to reassure them about the company’s future when he was no longer there to run it.

Several thousand investors gathered in an Omaha amphitheater to listen to Mr. Buffett and the company’s vice chairman answer their questions in the first personal meeting since the pandemic began.

The majority were less than 40,000 in the past.

Berkshire Hathaway’s revenue in the first quarter fell more than 53% due to a sharp change in the value of its investments, but its chairman and chief executive Warren Buffett found ways to use some of the money. . the big pile of company money.

Berkshire Hathaway said it earned $ 5.46 billion, or $ 3.702 per Class A share, in the quarter. That’s down from $ 11.7 billion, or $ 7.638 per Class A share, a year ago.

The main change in the quarter was that Berkshire’s cash mountain shrank to $ 106 billion from $ 147 billion at the beginning of the year, when it invested $ 51 billion in stocks. Mr. also spent. Buffett of $ 3.2 billion to repurchase Berkshire shares.

In the first quarter, Warren Buffett agreed to buy insurance conglomerate Alleghany for $ 11.6 billion and he made a multibillion-dollar investment in multinational information technology company HP and the American company involved in hydrocarbon exploration, Occidental Petroleum. However, he has yet to disclose all of his stock purchases, so it’s not clear at this time where Berkshire has also invested this year.

However, Berkshire said its stake in oil giant Chevron reached $ 26 billion at the end of the quarter, from $ 4.5 billion at the beginning of the year. Edward Jones financial services analyst Jim Shanahan said that with the combined investment of Chevron and Occidental, Berkshire now has more than $ 40 billion invested in the oil sector.

Berkshire, however, said the value of its investments fell $ 1.58 billion in the first quarter while last year its estimated investments rose $ 4.7 billion. This caused most of the change in net income.

Mr Buffett said Berkshire’s operating profits were a better measure of the company’s performance because they did not include investment gains and losses. Through this measure, Berkshire’s revenues are flat to $ 7.04 billion, or $ 4,773.84 per Class A share, from $ 7.018 billion, or $ 4,577.10 per Class A share, last year.

This exceeded Wall Street’s expectations. Four analysts polled by FactSet expect Berkshire to report an operating profit of $ 4,277.66 per Class A share.

Berkshire said on Saturday that revenues have improved in most of its businesses, including the metals, equipment and manufacturing businesses it owns, but investment income has fallen on its oil companies.

According to Mr. Buffett, the company was able to take advantage of the highly speculative environment on Wall Street.

“Berkshire is lucky enough to get something right sometimes, not because we’re smart, but because we’re sober,” he said.

Mr. Buffett, 91, did not have to answer several questions about his property. He said last year that he would hand over the reins to Vice President Greg Abel. Two other investment directors will lend him help.

He said Berkshire’s decentralized culture relies heavily on trusting people to do the right thing and avoid unnecessary risk. This will allow the company to thrive in the future.

“Berkshire has been established forever. There will be no end, Mr. Buffett explained. The next leadership and the next are the custodians of the integrated corporate culture.

In addition to the investments, Berkshire Hathaway owns more than 90 businesses, including BNSF Railway, several basic equipment, Geico Insurance, and a range of manufacturing and retail businesses.

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