Tuesday , August 9 2022

Warren Buffett is about to disclose if her child has $ 100 billion answers


This Saturday Berkshire Hathaway Inc. will present the traditional letter to the shareholders the Oracha writes. The text could reveal issues such as the excessive liquidity of the company and the company's progression.

Since US stocks have summed up the worst year since the financial crisis, Berkshire Hathaway Inc., the billionaire's investment vehicle Warren Buffett, spent less than $ 2.2 billion on net purchases of stock in the fourth quarter.

That means that its cash, which has remained more than $ 100 billion in the last five quarters, is probably stubborn, except in the case of very unusual amounts of loans. And that's our force to ask questions about what Buffett expects before launching the company's annual letter for this Saturday.

Berkshire's executive director has been struggling to find important bargains and a price that could make a big dentist in his cash problem. He did not sit back, he bought shares from lenders such as JPMorgan Chase & Co. a Bank of America Corp. But even in the third quarter, when he spent more on net purchases of shares in more than four years, the money was given at US $ 104 billion. Investors will see how much money Berkshire had at the end of the year with a Saturday letter.

"Money is getting faster than its implementation," said David Sims, president of Sims Capital Management, who oversees $ 50 million, including the Class B shares of Berkshire.

Buffett company took a step in 2018 to open another level of capital use by leaving its share repurchase policy. It was a critical change to a company whose CEO has preferred to spend money on ordinary shares in length or add a business to its $ 507 billion conglomerate. The change highlighted how difficult it is for Buffett to put money circulating fast enough to keep up with the increasing amounts of money that Berkshire accumulates.

"Things are expensive," said Meyer Shields, an analyst at Keefe, Bruyette & Woods, in an interview. Berkshire has traditionally been quite careful and patient enough not to buy things that are expensive, that is one of the elements of their success and that's what they need to do. "

Here are other topics that can appear in a Saturday letter:

Headache calculation

Buffett warned shareholders about the "wild" changes that derive from new accounting rules that require Berkshire, in Omaha, Nebraska, to incorporate unrealized gains and losses into its equity portfolio in income figures net. That could contribute to $ 22.4 billion in net losses for Berkshire in the fourth quarter, compared to earnings of US $ 32.6 billion during the same period last year, according to Morgan Stanley estimates.


Troi Buffett was 88 in August and his long-term business partner, Charles Munger, celebrated his 95th anniversary in January. That's the shareholder questions for the next generation of leaders in Berkshire. The company promoted Ajit Jain, 67, and Greg Abel, 56, to vice president's positions last year, the changes Buffett said as part of a "move to succession."

Beyond that, Buffett has not yet given much more clues about succession. He referred to the change in a few short lines in last year's letter, saying that "Berkshire blood" flows through Jain and Abel's veins and that Buffett and the shareholders were lucky to have both executives.

Cathy Seifert, an analyst at CFRA Research, said that investors could be surprised at a glance if more detail is provided.

Politics, economics

With the presidential election going to happen in 2020 and the constant conversation about the political department in the United States, it is hard to avoid political debates to warm up. But Buffett has been able to penetrate lightly in political matters in recent years.

Hillary Clinton supported the presidential election of 2016 and then avoided deepening policies and President Donald Trump. Shields from KBW said that Buffett could recognize the political department in the country and avoid detailed comments on warm political issues.

The letter could penetrate more to the American economy than to politics. Buffett has often defended the United States, saying that "the country's economic land is still fertile." But after a year of instability in the market and more talk about a possible recession, will Buffett maintain its optimism?

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