Famous investor and Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) The acquisition of President Warren Buffett is always closely watched. After all, the “Oracle of Omaha”, as they call it, has devastated the market. Fueled by Buffett’s shares and current acquisitions over the years, Berkshire Hathaway’s average annual return has doubled S&P 500is since 1965, and leads to life-changing wealth creation for long-time shareholders.
So, what has Warren Buffett been betting big on lately? In Berkshire’s latest quarterly report, it revealed that the company had invested $ 5.1 billion in its own resources. The capital issue represents Berkshire’s largest share sale ever.
Warren Buffett. Image Source: Getty Images.
A $ 5.1 billion bet
It’s already clear that Berkshire chairman and CEO Warren Buffett believed his share of his own business was a good deal. Total acquisitions of shares in the fourth quarter of 2019 and the first quarter of 2020 were greater than all other acquisitions of the company combined in the two periods.
And now there’s absolutely no doubt Buffett thinks Berkshire’s share is worth buying, as Omaha’s Oraha record of $ 5.1 billion in Q2 purchases was significantly higher than the $ 1.7 billion billion that the company spent on buying shares in the first quarter of 2020. Even more tellingly, second-quarter purchases exceeded the $ 4.9 billion Berkshire spent on buying its own stock in mid-2019.
Investors should not underestimate the implications of these repurchases. When Buffett buys stock back, it is not some form of financial engineering with not much thought about building shareholders. The CEO has repeatedly claimed that the company will only buy back its share if he and his investment partner Charlie Munger believe it is selling for less than what it was worth.
“If the price-to-value discount (as we estimate it) expands, we will likely become more aggressive in buying shares,” Buffett said in Berkshire’s 2019 annual letter to shareholders. “However, we will not support the stock at every level.”
What else did Buffett buy?
Of course, there is always a chance that Buffett spent more money on a purchase of another stock in the quarter than spending the purchase of her own shares. However, given the importance of this capital outlay, it is unlikely that any single investment is worth more than what Berkshire spent on its own shares.
Investors will have to wait until Berkshire submits its 13F submission for the quarter to see if there were any other big tubes during the period. Last year, Berkshire’s 13F submission for its second quarter was submitted to the Securities and Exchange Commission on 14 August.
