Buffett invests a large portion of Berkshire Hathaway’s money 2022-04-30 15:45:32

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Omaha, Neb. Shareholders have something to talk about on Saturday annual meeting.

Berkshire said it earned $5.46 billion, or $3,702 per Class A share, during the quarter. That’s down from $11.7 billion, or $7.638 per Class A share, a year ago.

But the main change during the quarter was that Berkshire’s cash pool shrank to $106 billion from $147 billion at the start of the year as it invested $51 billion in stocks. Buffett also spent $3.2 billion to buy back Berkshire shares.

Buffett told shareholders on Saturday that right after writing to them in his annual February 26 letter that he was having trouble finding anything to buy at attractive prices, Berkshire spent more than $40 billion on stocks over the next three weeks, including one day in early March when he spent $4.6 billion at the peak.

During the first quarter, Buffett agreed to rich buy The insurance conglomerate amounted to 11.6 billion dollars and made billions of dollars Investments At HP Inc. and Occidental Petroleum. Buffett said Berkshire bought a 14% stake in Occidental in the first half of March as it built up its stake, adding to its already massive investment in Apple stock this quarter. However, he hasn’t revealed all of his stock purchases yet, so it’s not immediately clear what all Berkshire has invested this year.

But Berkshire said in its quarterly report that its stake in oil giant Chevron had ballooned to $26 billion at the end of the quarter, up from $4.5 billion at the start of the year, to become one of the company’s four largest investments. With Chevron and Occidental’s combined investments, Berkshire now has more than $40 billion invested in the oil sector, said Edward Jones analyst Jim Shanahan.

Buffett said Berkshire has been able to capitalize on the fact that Wall Street is largely run like a “gaming hall” where many people speculate heavily on the stock.

“Every once in a while, Berkshire gets a chance to do something, and it’s not because we’re smart. It’s because we’re sane.” Buffett said.

Charlie Munger, Buffett’s investment partner, said there’s been an insane amount of speculation in the stock market over the past two years as the market has gone up.

“We have people who know nothing about stocks that are recommended by stockbrokers who know even less,” Munger said.

But Berkshire said the value of its investment shrank by $1.58 billion in the first quarter when paper estimates of its investment a year earlier grew by $4.7 billion. That represented most of the swing in net profit.

Buffett says Berkshire’s operating profit is a better measure of a company’s performance because it excludes investment gains and losses. By that measure, Berkshire’s earnings were flat at $7.04 billion, or $4,773.84 per Class A share, up from $7.018 billion, or $4,577.10 per Class A share, a year earlier.

That exceeded Wall Street expectations. The four analysts surveyed by FactSet expected Berkshire to report operating profit of $4,277.66 per Class A share.

Berkshire said on Saturday that earnings improved in most of its businesses, including the railroad, utilities and manufacturing companies it owns, but that insurance income fell at insurers.

In addition to investments, Berkshire Hathaway owns more than 90 companies, including BNSF Railroad, several major utilities, Geico insurance, and a variety of manufacturing and retail businesses. Tens of thousands of shareholders were gathering in Omaha Square not far from the company’s headquarters on Saturday to hear Buffett and Berkshire’s vice presidents spend hours answering all questions.

Japanese investor Heihachiro “Hutch” Okamoto is attending the meeting for the first time this year in part because he hears a lot of interest in investing in the US stock market at his brokerage firm in Japan.

“Mr. Buffett is an agent for the US stock market, so I wanted to see him here,” Okamoto said.

Janet Dalton of Overland Park, Kansas, said she’s been attending the meetings for decades. Her family has a longer association with the company because her father bought shares in textile company Berkshire Hathaway even before Buffett took it over in 1965 and began turning it into the conglomerate it is today. They never sold the stock, which now sells for nearly $500,000 apiece.

Dalton said she misses the more detailed working answers that Buffett used to give in previous meetings she attended.

“When I first attended meetings, it was like getting a micro-MBA. Now it’s more general,” Dalton said. But part of what makes her come back year after year is the chance to reconnect with friends and fellow investors she met in previous meetings.

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