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- His argument centers on the share buyback, which Amazon has largely forgiven with Bezos for investing in business growth.
- “As we come out of 2020, I think we need to realize that we have a very fragile economy, a very fragile ecosystem of companies that are overstretched. We need to create incentives for these people to save and invest in the future.” he said.
- Read more on Business Insider.
Move over to Warren Buffett.
Billionaire Chamath Palihapitiya said in an interview on CNBC Tuesday that he believes Amazon CEO Jeff Bezos is a better investor than Warren Buffett, the famous “Omaha Oracle” and Berkshire Hathaway leader.
“People used to criticize Jeff Bezos for not being profitable, but when you looked under the hood, he was the best investor of our generation, even better than Buffett, because he would take billions of dollars of free cash flow and invest it going forward, “said Palihapitiya, CEO of Social Capital.
Palihapitiya’s comments came in a lengthy interview with CNBC where he referred to Tesla, Elon Musk, Federal Reserve stocks, bitcoin, the reopening of the US economy. USA And more.
It also continued its recent crusade against share buybacks, which it called a “fundamentally idiotic business practice” on Tuesday. Palihapitiya is a Bezos fan because Amazon has largely skipped the practice under his leadership, rather than investing in building the business.
In the company’s first-quarter earnings, Bezos told investors to “take a seat, because we don’t think small,” before announcing that Amazon plans to spend the approximately $ 4 billion it expects in second-quarter earnings in ” expenses related to COVID products for customers and keeping employees safe. “
Read more: A Wall Street expert exposes how the ‘downright terrifying’ rise in the stock market within this crisis may be laying the groundwork for yet another 32% drop.
Buffett, on the other hand, has defended the value of share buybacks when done responsibly. The company repurchased $ 1.7 billion of its own shares in the first quarter, according to its earnings report in early May.
Palihapitiya said he agrees with Buffett that the share buybacks should be carried out under the right conditions.
“As we come out of 2020, I think we need to realize that we have a very fragile economy, a very fragile ecosystem of companies that are overstretched. We need to create incentives for these people to save and invest in the future.” he said.
He continued: “There is a business case in each company to save and / or plan for the future, and instead of randomly returning it to the open market it is one of the dumbest business decisions you could make.”
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