Never too old… to lead your company to its highest-ever operating profit. Berkshire Hathaway, headed up by nearly 93-year-old Warren Buffett (wish him a HBD August 30), notched $10B in quarterly operating profit for the first time. After Berkshire shared the results on Saturday, the stock hit a record yesterday.
Cash pile: BH grew its holdings of cash and cash equivalents (mostly Treasuries) to $147B in the quarter as interest income rose, courtesy of Fed hikes.
Blue chips: BH’s Geico shares boosted its portfolio as the insurer had fewer auto claims, while the value of its massive Apple holding (~$178B) paid off as the tech giant touched a $3T market cap this year.
Warren-nomics… After taking over Berkshire Hathaway in 1965, Buffett built a reputation as an investment genius, aka “The Oracle of Omaha” (back in the day, Berkshire's holdings often outperformed the S&P 500). Still, investors look to the long-standing conglomerate for a glimpse into the broader economy because its holdings are a sampler platter of insurance giants, railroads, utilities, and Big Tech. Buffett’s economic musings, laid out in his annual shareholder letter, are analyzed by investors as if they were Shakespearean sonnets.
Patience and profits: Buffett highlighted a long-term investing strategy in his most recent yearly missive: “At Berkshire, there will be no finish line.”
In practice: BH has sold $18B more of stocks than it’s bought so far this year, and it’s made only one big acquisition since 2016 (insurer Alleghany for nearly $12B last year).
Sitting on your hands can pay off… when they’re clutching billions worth of Apple shares and Treasuries. Buffett believes that his conservative strategy of passing on buzzy investments and focusing on value-based investments has helped Berkshire beat the market during tough times. As Buffett (poetically) wrote in February: “The weeds wither away in significance as the flowers bloom. Over time, it takes just a few winners to work wonders.”