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Saturday 7 November 2020
So far, the crown crisis can’t do much for Warren Buffet’s billions of US investors. In order to raise his investment company’s stock price, the multibillionaire is now buying back stock in his company for a record sum. For Buffett a deviation from the old principles.
Warren Buffett’s investment firm, Berkshire Hathaway, is increasingly relying on share buybacks in the Crown crisis. In the three months to the end of September, the conglomerate said on Saturday it had spent about $ 9 billion, the equivalent of about € 7.6 billion, to buy back its shares. In the third quarter alone, more than ever was spent on this type of stock price hold in a full calendar year. The amount already amounts to around 16 billion dollars during the year.
Many other companies have restricted stock repurchases to hold money together during the pandemic. But Buffett sat down with Berkshire Hathaway with a gross of $ 145.7 billion. Cash and cash equivalents therefore decreased only slightly compared to the previous quarter. The 90-year-old star investor would actually rather spend the money on investments – for a long time he largely refused to buy back stocks to keep prices. But Buffett has been struggling for some time to find suitable acquisition targets.
Berkshire Hathaway’s day-to-day business continues to suffer from the Crown crisis. Operating profit fell 32% year-on-year to $ 5.5 billion, with a loss for the major insurance sector. The net result, however, strongly benefited from the recovery of the equity market and went from 16.5 billion to 30.1 billion dollars. Buffett himself, however, always advises not to pay close attention to this indicator. As unrealized gains and losses from investments are shown here, there are large fluctuations that say little about the actual performance of business.
Berkshire Hathaway owns around 90 companies, as well as various stock blocks of large publicly traded companies like Coca-Cola, Wells Fargo and Apple – the iPhone company in particular has become a Buffett favorite in recent years. The investment legend, known as “the Oracle of Omaha” due to its good smell for lucrative investments, has led the conglomerate for more than 50 years. “Forbes” recently estimated Buffett’s personal wealth at approximately $ 79 billion. According to the US magazine, he is the fourth richest person in the world.
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