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Tag: Berkshire Hathaway Inc

  • Just 5 stocks make up the lion’s share of Warren Buffett’s equity portfolio. Here’s what they are

    Just 5 stocks make up the lion’s share of Warren Buffett’s equity portfolio. Here’s what they are

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  • Here’s what’s going on at Warren Buffett’s shopping extravaganza for shareholders

    Here’s what’s going on at Warren Buffett’s shopping extravaganza for shareholders

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    People at the See’s Candies display at the Berkshire Hathaway Shopping Day event, May 5, 2023.

    David A. Grogan | CNBC

    Berkshire Hathaway‘s annual shareholder meeting this weekend is kicking off with a shopping extravaganza.

    Called the “Berkshire Bazaar of Bargains,” the shopping event is a tradition at the yearly convention. With over 20,000 square feet of showroom space and more than 50,000 items of inventory, the exhibit hall features goods from a myriad of the conglomerate’s holdings.

    This year, shareholders can snap up Warren Buffett-themed plush dolls from Squishmallows for the first time. They can also snag Buffett-themed apparel from Brooks Sports, as well as Berkshire chocolate coins from See’s Candies.

    The event is held in downtown Omaha at the CHI Health Center. Only shareholders can participate at the event, and claim the discount.

    CNBC and CNBC.com will exclusively cover the annual meeting starting Saturday at 10 a.m. ET.

    Squishmallows

    A person visits the Squishmallows display at the Berkshire Hathaway Shopping Day event, May 5, 2023.

    David A. Grogan | CNBC

    This is Squishmallows’ first time ever at Berkshire’s shopping event, and the toy brand turned out to be a big hit. The plush toys attracted long lines at checkout with many shareholders snagging Warren Buffett cartoon dolls.

    An image of Warren Buffett at the Berkshire Hathaway Shopping Day, May 5, 2023.

    Yun Li | CNBC

    Berkshire got into Squishmallows through its acquisition of Alleghany, which closed in the fourth quarter of 2022. While Alleghany’s main business is insurance, the company is also a conglomerate. It owns a few non-financial businesses, including Jazwares, which is a U.S. toymaker with brands like Pokémon and Squishmallows.

    See’s Candies

    The See’s Candies display at the Berkshire Hathaway Shopping Day event, May 5, 2023.

    Yun Li | CNBC

    The sweets at See’s Candies again drew a big crowd at the “Woodstock for Capitalists.” The “Berkshire Box” of chocolate featuring a dancing Buffett on the package was a popular item at the booth. So was chocolate walnut fudge, a favorite of the Oracle of Omaha. Buffett said See’s Candies sold 11 tons of peanut brittle and chocolates at last year’s event.

    Brooks Sports

    People wait on line at the Brooks display at the Berkshire Hathaway Shopping Day event, May 5, 2023.

    Yun Li | CNBC

    Investors could buy sneakers, socks and t-shirts bearing illustrations of Warren Buffett from the Brooks booth. They can also participate in the 5K run co-hosted by the sportswear company and Berkshire in downtown Omaha on Sunday morning.

    Pampered Chef

    The Pampered Chef display showing Warren Buffet at the Berkshire Hathaway Shopping Day event, May 5, 2023.

    Yun Li | CNBC

    A cardboard cutout of Warren Buffett in an apron greeted shoppers at the Pampered Chef booth, where investors could pick up kitchen tools — including a spatula with the Oracle of Omaha’s face on one side, and Charlie Munger’s on the other.

    Borsheims

    Jewelry display from Ruchi New York at Borsheims shareholder-only shopping night.

    Yun Li | CNBC

    Jewelry display from Ruchi New York at Borsheims shareholder-only shopping night

    Yun Li | CNBC

    There’s a separate shareholder-only shopping event at Borsheims, about 14 miles away from the main convention center. Berkshire shareholders browsed through one-of-a-kind jewelry, engagement rings and watches available for purchase at a discount. This seven-carat emerald ring from Ruchi New York is selling for $400,000 with 25% off (picture above, on the right).

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  • Warren Buffett’s Berkshire Hathaway has been a fortress stock during recessions and bear markets. Here’s how

    Warren Buffett’s Berkshire Hathaway has been a fortress stock during recessions and bear markets. Here’s how

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    As investors head to the Berkshire Hathaway annual shareholders meeting this weekend, they can rest easy in a stock that’s not only trading near all-time highs — it’s a safe haven during turbulent times. 

    Berkshire has a history of outperforming the S&P 500 during recessions, and especially well during bear markets, according to data from Bespoke Investment Group. Since 1980, Berkshire shares have beat the broader market over the course of six recessions by a median of 4.41 percentage points.

    Even more impressive is the stock’s performance during bear markets. Over the same time period, the conglomerate outpaced the S&P 500 each time it dropped 20%, beating the broader index by a median of 14.89 percentage points. 

    For Warren Buffett, that reputation is no accident, but one that has been built over many decades by maintaining a long-term focus to steer investors through tough waters, as well as keeping conservative investments. 

    “[One] stock that has gained a reputation for safety is Berkshire Hathaway (BRK/A), and based on the last several decades, the distinction has been earned,” read a Bespoke note from earlier this week. 

    Long-term focus 

    Known for his value-based investing style, the “Oracle of Omaha” makes long-term bets on companies that boast strong fundamentals and are likely to see future growth. 

    Among his notable winners over the years include Apple, which he started buying in 2016, and has been compared to his legendary investment into Coca-Cola. The iPhone maker has outperformed throughout the bear market, similarly driving outperformance for Berkshire Hathaway as Apple accounts for roughly 45% of the firm’s portfolio, according to CNBC’s Berkshire Hathaway portfolio tracker. It’s also about one-quarter of Berkshire’s market cap. Apple shares are up 27% this year. 

    “As goes Apple, so goes a good deal of Berkshire,” Bespoke’s Paul Hickey said. 

    That has helped Berkshire Hathaway Class A shares climb more than 4% this year. That’s slightly below the S&P 500, but the stock is still trading near 52-week highs it reached just this week. On Monday, it reached $506,000 per share. It first crossed the half a million dollar threshold last year. 

    For Berkshire shareholders attending this year’s conference, the stock price performance proves the value of holding shares over a long period of time. 

    “The vast majority of the people that show up here are over the age of 60. That’s who’s gotten rich from owning Berkshire Hathaway,” said Bill Smead, founder and chairman of Smead Capital Management and a Berkshire shareholder. “People held Berkshire Hathaway to a fault and they got that benefit.” 

    To be sure, his wagers haven’t always paid off. The billionaire investor notoriously sold all his airline stocks at the onset of the coronavirus pandemic, which meant a loss to his investment. 

    A conservative stance 

    The billionaire investor has also maintained a conservative stance. While that has meant he’s sometimes underperformed during bull runs, it’s what’s helped the investor beat the market during periods of volatility. 

    Part of that has to do with his massive cash hoard. While Buffett’s operating profits fell during the fourth quarter in 2022, his cash allocation grew to $128.651 billion, up from roughly $109 billion in the third quarter. In fact, Buffett said Berkshire will continue to hold a “boatload” of cash and U.S. Treasury bills. 

    “We will also avoid behavior that could result in any uncomfortable cash needs at inconvenient times, including financial panics and unprecedented insurance losses,” Buffett wrote in his annual shareholder letter. “And yes, our shareholders will continue to save and prosper by retaining earnings. At Berkshire, there will be no finish line.”

    It also has to do with his long-held affection for insurance companies. The firms that are well run constantly review their risks to remain profitable and are huge cash generators. 

    He first bought property and casualty insurer National Indemnity more than a half century ago, which helped produce cash for Berkshire’s future ventures. Last year, he bought insurance firm Alleghany in a $11.6 billion transaction — a deal that was Buffett’s biggest since 2016. 

    In the past, Buffett has called investing a “simple game,” and that has proved out over his career. Berkshire has had a compounded annual gain of 19.8% from 1965 to 2022, compared to 9.9% for the S&P 500 during the same time.

    “Buffett, throughout his career, has made a habit of going against the crowd, and that has served him well,” Bespoke’s Hickey said. “That’s something that most investors, while they say they like to do that, they have a much harder time doing that in practice.” 

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  • Charlie Munger reportedly warns of trouble for the U.S. commercial property market

    Charlie Munger reportedly warns of trouble for the U.S. commercial property market

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    Charles Munger at the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska, April 29, 2022.

    David A. Grogan | CNBC

    Charlie Munger believes there is trouble ahead for the U.S. commercial property market.

    The 99-year-old investor told the Financial Times that U.S. banks are packed with “bad loans” that will be vulnerable as “bad times come” and property prices fall.

    “It’s not nearly as bad as it was in 2008,” he told the Financial Times in an interview. “But trouble happens to banking just like trouble happens everywhere else.” 

    Munger’s warning comes as U.S. regulators have asked banks for their best and final takeover offers for First Republic by Sunday afternoon, the latest in what has been a tumultuous period for midsized U.S. banks.

    Since the failure of Silicon Valley Bank in March, attention has turned to First Republic as the weakest link in the American banking system. Shares of the bank sank 90% last month and then collapsed further this week after First Republic disclosed how dire its situation is.

    Berkshire Hathaway, where Munger serves as vice chairman, has largely stayed on the fringe of the crisis despite its history of supporting American banks through times of turmoil. Munger, who is also Warren Buffett’s longtime investment partner, suggested that Berkshire’s restraint is partially due to risks that could emerge from banks’ numerous commercial property loans.

    “A lot of real estate isn’t so good anymore,” Munger said. “We have a lot of troubled office buildings, a lot of troubled shopping centers, a lot of troubled other properties. There’s a lot of agony out there.”

    Read the complete Financial Times interview here.

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  • Warren Buffett-backed BYD announces new shock absorption tech for premium EVs

    Warren Buffett-backed BYD announces new shock absorption tech for premium EVs

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    BYD’s Han electric car, pictured here at the 2021 Shanghai auto show, is one of the most popular new energy vehicles in China.

    Evelyn Cheng | CNBC

    SHENZHEN, China — Electric vehicle giant BYD is banking on new driver-assist technology to smooth out car rides.

    BYD, backed by Warren Buffett’s Berkshire Hathaway, announced Monday a new technological system for stabilizing car rides through rugged terrain, sharp turns and even shallow water. The shock absorption tech is set to be a feature of the company’s recently launched premium brand Yangwang.

    “Traditionally, luxury cars were determined by brand and history. For luxury new energy vehicles, it’s a matter of what tech and products,” BYD founder Wang Chuanfu said in Mandarin at a launch event Monday, according to a CNBC translation.

    He claimed the tech represented a “breakthrough” that “leads and surpasses foreign technological level.”

    The update comes ahead of the Shanghai Auto Show, set to kick off next week, where many Chinese car companies are set to make product and model announcements.

    Part of the tech system uses the same “lidar” sensors used in assisted driving, according to BYD. Lidar, short for “light detection and ranging,” uses lasers to create detailed maps of the surrounding area.

    The automaker said in a release its new “DiSus” system “provides a foundation for the future development of Advanced Driver Assistance Systems (ADAS).”

    The company has taken a relatively cautious approach to self-driving tech.

    When asked about “smart driving” during a call with investors in late March, BYD management said autonomous driving still faces the challenge of determining liability in the event of an accident. Still, management said, advanced assisted driving tech has the potential to improve overall safety. That’s according to a filing of last month’s call accessed through the Wind Information database.

    The industry as a whole has been working to balance ambitious driver-assist options with measured safety protocols. EV leader Tesla in February recalled more than 360,000 cars over assisted-driving software for city streets that it said may cause crashes.

    That urban assisted driving software is not available for Tesla drivers in China.

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    BYD

    It was not immediately clear how Tesla’s shock absorption capabilities compared with BYD’s, but other car companies in China are looking into similar technology.

    In September, Nio’s investment fund Nio Capital led a $39 million financing round into Boston-based ClearMotion, which develops software for active suspension.

    Many details still unknown

    BYD’s Wang didn’t address what the company’s new DiSus system would cost to use, or when it would become widely available.

    Two of the compatible car models — Yangwang’s forthcoming U8 SUV and the Denza N7 SUV — are not yet available for deliveries. Auto giant Daimler has a small stake in BYD’s Denza brand.

    BYD said some of its existing Han, Tang and Denza models are set to receive the new tech through an over-the-air upgrade.

    The new system comes in three versions — “damping,” “air,” and “hydraulic” — which are set for individual integration with certain BYD models.

    Read more about electric vehicles from CNBC Pro

    In the first quarter, BYD said it sold 264,647 all-electric passenger cars, up more than 80% from a year ago. Hybrid passenger vehicle sales doubled from a year ago to 283,270 in the first quarter.

    Tesla, for its part, said it delivered more than 422,000 cars worldwide in the first quarter, without sharing a regional breakdown. China typically accounts for well over 20% of Tesla’s revenue.

    Why this company is called China's Tesla

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  • Citi just named 4 new picks, including a Buffett-backed stock it says could soar 70%

    Citi just named 4 new picks, including a Buffett-backed stock it says could soar 70%

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  • Japanese trading houses rise as Warren Buffett says he plans on buying more

    Japanese trading houses rise as Warren Buffett says he plans on buying more

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    Warren Buffett, chairman and chief executive officer of Berkshire Hathaway Inc., in Iwaki City, Fukushima Prefecture, Japan in 2011.

    Bloomberg | Bloomberg | Getty Images

    Shares of Japanese trading houses rose in Tuesday afternoon trade after Warren Buffett, chairman and CEO of Berkshire Hathaway, said he plans to increase his holdings.

    In an interview with Nikkei, Buffett said he is considering additional investment in five major Japanese trading houses, adding that he was “very proud” of his existing investments in them.

    Shares of Mitsubishi Corp. rose 2.7% in Japan’s afternoon trade, Mitsui & Co. gained 2.6%, Itochu Corp climbed 2.5% and Marubeni Corp. advanced 3.7%. Sumitomo Corp. also rose 2.7%.

    Buffett told Nikkei that he is planning to meet with the companies later in the week “to really just have a discussion around their businesses and emphasize our support,” according to the report.

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    Japan’s five largest trading companies — known as sogo shosha — are conglomerates that import everything from energy and metals to food and textiles into resource-scarce Japan. They also provide services to manufacturers. The trading houses have helped grow the Japanese economy and contributed to the globalization of its business.

    Buffett told Nikkei that he currently holds a 7.4% stake in Itochu — roughly a 0.6 percentage point increase from the 6.8% holding disclosed in November regulatory filings.

    Late last year, Berkshire Hathaway increased its positions in the five leading trading houses in Japan by at least 1 percentage point to more than 6% each — after its initial purchase in August, when Buffett acquired stakes worth more than $6 billion in total on his 90th birthday.

    November filings showed Berkshire Hathaway’s positions stood at 6.6% in Mitsubishi Corp., 6.6% in Mitsui & Co., 6.2% in Itochu Corp., 6.8%  Marubeni Corp. and 6.6% in Sumitomo Corp.

    Nikkei separately reported that Buffett’s Berkshire Hathaway is preparing another issuance of yen-denominated bonds, which was seen as a signal the conglomerate would increase its investments in Japan.

    — CNBC’s Becky Quick contributed to this report

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  • Inflation’s inventory gluts are here to stay and will hit the bottom line in weaker economy: CNBC Supply Chain Survey

    Inflation’s inventory gluts are here to stay and will hit the bottom line in weaker economy: CNBC Supply Chain Survey

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    CHRIS J RATCLIFFE | AFP | Getty Images

    Bloated warehouse inventories are an expensive pressure eating away at the bottom line of many companies, and for many, the excess supply and associated costs of storage won’t abate this year, according to a new CNBC Supply Chain Survey.

    Just over one-third (36%) said they expect inventories to return to normal in the second half of this year, with an equal percentage expecting the gluts to last into 2024 — 21% saying a return to normal can occur in the first half of the year, and another 15% expecting normal activity by the first half of 2024. But uncertainty about inventory management is significant, with almost one-quarter (23%) of supply chain managers saying they are not sure when gluts will be worked off.

    “We don’t expect significant decreases in inventory levels within our network in 2023,” said Paul Harris, vice president of operations for WarehouseQuote. “Several of our manufacturing clients are experiencing dead/bloated inventory challenges due to over-ordering in the container grid-lock from prior quarters. A majority have elected to keep the inventory on hand and are opposed to liquidating.

    A total of 90 logistics managers representing the American Apparel and Footwear Association, ITS Logistics, WarehouseQuote, and the Council of Supply Chain Management Professionals, or CSCMP, participated in the survey between March 3-21 to provide information on their current inventories and the biggest inflationary pressures they are facing, and often passing on to the consumer.

    What’s sitting in warehouses, and what companies are doing about it

    Logistics experts tell CNBC that 20% of their excess inventory sitting in warehouses is not seasonable in product nature. Slightly more than half of survey participants said they would keep the items in warehouses. But a little over one-quarter (27%) said they are selling on the secondary market because inventories impact a company’s bottom line through elevated storage prices.

    Harris told CNBC many clients with perishable goods are selling them on secondary markets to avoid destroying products. “However, if a secondary market is not an option, they are forced to destroy the product,” he said. “If it’s a consumable, they are donating the goods to take tax deductions.”

    Investors are worried about the earnings and margin trends and expect Wall Street to revise estimates lower. The supply chain pressures will be among the factors that weigh on quarterly numbers.

    “Inventory carrying costs continue to rise, driven by inflationary pressures and late shipments,” said Mark Baxa, CEO of CSCMP. “This means that with every day that passes, three things are happening … growing sales risk, margin pressure, and D&O [deteriorated and/or obsolete].”

    Almost half surveyed said the biggest inflationary pressures they are paying are warehouse costs, followed by the “other” category, which includes rent and labor.

    ITS Logistics told CNBC that many clients across industries have been using ocean containers, rail containers and 53-foot trailers for storage because distribution centers were full.

    “These charges will start materializing in Q2 or Q3 financial results,” said Paul Brashier, vice president of drayage and intermodal at ITS Logistics.

    The survey found 50% of respondents saying the average length of time they are using ocean containers for storage is over four months.

    “We are seeing similar trends in our data and ecosystem,” Brashier said.

    More inflation costs going to the consumer

    Traditionally, warehousing costs and the associated labor costs are passed on to the consumer, increasing or sustaining the price of a product. Nearly half (44%) of survey respondents said they are passing on at least half of their increased costs, if not more, to consumers.

    “It’s clear that supply chain challenges and all their associated costs continue to stir inflationary pressures,” said Stephen Lamar, president and CEO of the American Apparel and Footwear Association. “Given ongoing inventory concerns and the fragile nature of our logistics system, there are other pressures and uncertainty.”

    His group is calling for West Coast port labor negotiations to be quickly finalized and for the government to “aggressively remove other cost pressures,” a reference to Section 301 tariffs on Chinese imports, which he said continue to make supply chains more expensive.

    Manufacturing orders and the economic outlook

    Recent data on manufacturing has shown a deterioration in the economy, with the ISM Manufacturing index in contraction level based on March data released this week. The U.S. services sector slipped closer to contraction in March, according to the ISM Services Index, with sharp declines in new orders, exports and price.

    Looking at the health of manufacturing orders for the next three months, 40% of logistics managers surveyed said they are not cutting orders, while a little under one-fifth (18%) said they are cutting orders by 30%.

    Inventory levels and consumer consumption are two factors influencing manufacturing orders.

    These orders help gauge China GDP as it reopens from its strict Covid protocols, since the country relies on manufacturing and trade for its economic growth.

    FreightWaves SONAR intelligence shows a slight uptick in ocean freight orders and recovery from the massive drop ahead of Lunar New Year, but the longer trend line remains a decrease in ocean bookings.

    The inventory glut is affecting trucking logistics in multiple ways. Not only are trucks moving fewer containers from the ports, they are also moving less from the warehouses to the retail stores. Data from Motive, which tracks trucking visits to North American distribution facilities for the top five retailers by volume, shows a drop in truck visits from warehouses.

    “The decline in visits to retail warehouses indicates weakness in consumer demand, but surprisingly may also be a sign of recovery in the supply chain,” said Shoaib Makani, founder and CEO of Motive. “With lead times to replenish inventory reduced from 2021 and 2022 highs, retailers are burning off existing inventories with the confidence that they will be able to replenish quickly.”

    Even with orders increasing, the inventory headwinds are a source of concern for logistics experts.

    “This survey confirms that we remain in an era of serious supply chain cost-to-serve challenges,” Baxa said. “Warehousing costs are contributing to these challenges that shippers are facing today and on the road ahead.”

    FreightWaves and ITS Logistics are CNBC Supply Chain Heat Map data providers.

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  • Stocks making the biggest moves midday: Micron, Paramount, McCormick and more

    Stocks making the biggest moves midday: Micron, Paramount, McCormick and more

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    Micron Technology headquarters in Boise, Idaho, March 28, 2021.

    Jeremy Erickson | Bloomberg | Getty Images

    Check out the companies making headlines in midday trading Tuesday.

    PagSeguro — Shares popped 5.3% after Citi upgraded the Brazilian payment stock to buy from neutral. The firm called the company’s fourth-quarter earnings unsurprising and said it is still in rough waters, but shares were more attractive following recent underperformance. Stone, which was also upgraded by Citi to buy from neutral, edged higher as well on Tuesday.

    Affirm — The pay-later service dropped 6.9% after Apple announced a competing service. Apple shares were down about 0.9%.

    Occidental Petroleum — The energy stock jumped nearly 4% after a regulatory filing showed Warren Buffett’s Berkshire Hathaway purchased an additional 3.7 million shares for $216 million on Monday and last Thursday. TD Cowen upgraded Occidental to outperform from market perform following the news.

    Micron Technology — The semiconductor stock was down 2.8% ahead of its scheduled second-quarter earnings report after the bell on Tuesday. Analysts expect revenue of $3.71 billion and a loss per share of 67 cents, according to FactSet. Micron’s shares have gained more than 14% in the last six months. 

    PVH — Shares soared 18.9% after the apparel company’s fourth-quarter adjusted earnings per share came in at $2.38, beating estimates of $1.67, per Refinitiv. Its revenue of $2.49 billion beat expectations of $2.37 billion. PVH’s guidance for the first quarter and full year also surpassed estimates.

    Paramount — Shares of the media giant gained 3.6% during midday trading on a rating upgrade from Bank of America from neutral to buy. The bank highlighted Paramount’s strong lineup of assets that could help the business in the event it puts itself up for sale.

    McCormick & Company — The spice maker’s stock price jumped about 10% during midday trading after reporting better-than-expected earnings for the first quarter. McCormick reported quarterly earnings of 59 cents per share, while analysts surveyed by FactSet expected 50 cents per share. 

    Alibaba — Shares soared by 12% after the e-commerce giant said it would split its company into six separate business groups, with each group having the potential to raise outside funding and go public.

    Ciena — The technology company advanced 4.9% after Raymond James upgraded the stock to strong buy from outperform.

    Walgreens Boots Alliance – Shares of the pharmacy giant rose more than 3% midday after the company reported an increase in its quarterly revenue despite seeing a sharp decline in demand for Covid tests and vaccines. Walgreens posted revenue of $34.86 billion for the most recent quarter, compared to analysts’ estimates of $33.53 billion, according to Refinitiv.

    Carnival Corp — The cruise operator’s stock price rose 5.9% on Tuesday after Wells Fargo upgraded Carnival to equal weight from underweight. The firm said it sees a more balanced risk/reward for the company

    — CNBC’s Alex Harring, Yun Li, Jesse Pound and Michelle Fox Theobald contributed reporting.

    Correction: According to FactSet, Micron is expected to post a loss of 67 cents per share. A previous version misstated the estimate.

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  • Crunch time for Credit Suisse talks as UBS seeks Swiss assurances

    Crunch time for Credit Suisse talks as UBS seeks Swiss assurances

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    Red pedestrian crossing signs outside a Credit Suisse Group AG bank branch in Basel, Switzerland, on Tuesday, Oct. 25, 2022. 

    Stefan Wermuth | Bloomberg | Getty Images

    Talks over rescuing Credit Suisse rolled into Sunday as UBS sought $6 billion from the Swiss government to cover costs if it were to buy its struggling rival, a person with knowledge of the talks said.

    Authorities are scrambling to resolve a crisis of confidence in the 167-year-old Credit Suisse, the mostly globally significant bank caught in the turmoil spurred by the collapse of U.S. lenders Silicon Valley Bank and Signature Bank over the past week.

    While regulators want a resolution before markets reopen on Monday, one source cautioned the talks are encountering significant obstacles, and 10,000 jobs may have to be cut if the two banks combine.

    The guarantees UBS is seeking would cover the cost of winding down parts of Credit Suisse and potential litigation charges, two people told Reuters.

    Credit Suisse, UBS and the Swiss government declined to comment.

    The frenzied weekend negotiations follow a brutal week for banking stocks and efforts in Europe and the U.S. to shore up the sector. U.S. President Joe Biden’s administration moved to backstop consumer deposits while the Swiss central bank lent billions to Credit Suisse to stabilise its shaky balance sheet.

    UBS was under pressure from the Swiss authorities to take over its local rival to get the crisis under control, two people with knowledge of the matter said. The plan could see Credit Suisse’s Swiss business spun off.

    This fund manager shorted Credit Suisse — and he’s sticking with his bet

    Switzerland is preparing to use emergency measures to fast-track the deal, the Financial Times reported, citing two people familiar with the situation.

    U.S. authorities are involved, working with their Swiss counterparts to help broker a deal, Bloomberg News reported, also citing those familiar with the matter.

    Berkshire Hathaway‘s Warren Buffett has held discussions with senior Biden administration officials about the banking crisis, a source told Reuters.

    'Timely and right' for Swiss National Bank to throw Credit Suisse a liquidity line: Advisory firm

    The White House and U.S. Treasury declined to comment.

    British finance minister Jeremy Hunt and Bank of England Governor Andrew Bailey are also in regular contact this weekend over the fate of Credit Suisse, a source familiar with the matter said. Spokespeople for the British Treasury and the Bank of England’s Prudential Regulation Authority, which oversees lenders, declined to comment.

    Forceful response

    Credit Suisse shares lost a quarter of their value in the last week. The bank was forced to tap $54 billion in central bank funding as it tries to recover from a string of scandals that have undermined the confidence of investors and clients.

    It ranks among the world’s largest wealth managers and is considered one of 30 global systemically important banks – the failure of any would ripple throughout the entire financial system.

    There were multiple reports of interest for Credit Suisse from other rivals. Bloomberg reported that Deutsche Bank was considering buying some of its assets, while U.S. financial giant BlackRock denied a report that it was participating in a rival bid for the bank.

    Interest rate risk

    The failure of California-based Silicon Valley Bank brought into focus how a relentless campaign of interest rate hikes by the U.S. Federal Reserve and other central banks – including the European Central Bank on Thursday – was pressuring the banking sector.

    SVB and Signature’s collapses are largest bank failures in U.S. history behind the demise of Washington Mutual during the global financial crisis in 2008.

    First Citizens BancShares is evaluating an offer for SVB and at least one other suitor is seriously considering an offer, Bloomberg News reported on Saturday.

    People walk by the New York headquarters of Credit Suisse on March 15, 2023 in New York City. 

    Fail or sale? What could be next for stricken Credit Suisse

    Banking stocks globally have been battered since SVB collapsed, with the S&P Banks index falling 22%, its largest two-week loss since the pandemic shook markets in March 2020.

    Big U.S. banks threw a $30 billion lifeline to smaller lender First Republic. U.S. banks have sought a record $153 billion in emergency liquidity from the Federal Reserve in recent days.

    The Mid-Size Bank Coalition of America asked regulators to extend federal insurance to all deposits for the next two years, Bloomberg News reported on Saturday, citing a letter from the coalition.

    In Washington, focus has turned to greater oversight to ensure that banks and their executives are held accountable.

    UBS in talks to acquire all or part of Credit Suisse

    Biden called on Congress to give regulators greater power over the sector, including imposing higher fines, clawing back funds and barring officials from failed banks.

    The swift and dramatic events may mean big banks get bigger, smaller banks may strain to keep up and more regional lenders may shut.

    “People are actually moving their money around, all these banks are going to look fundamentally different in three months, six months,” said Keith Noreika, vice president of Patomak Global Partners and a Republican former U.S. comptroller of the currency.

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  • Warren Buffett’s Berkshire Hathaway buys more Occidental Petroleum shares

    Warren Buffett’s Berkshire Hathaway buys more Occidental Petroleum shares

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    Warren Buffett

    Gerard Miller | CNBC

    Warren Buffett’s Berkshire Hathaway added to its already large Occidental Petroleum stake over the past trading sessions, a regulatory filing revealed Tuesday evening.

    The Omaha-based conglomerate bought nearly 5.8 million shares of the oil company in a few separate trades on Friday, Monday and Tuesday, paying prices in the range from $59.8 to $61.9, the filing showed.

    The latest purchase, totaling more than $350 million, marked the first time the “Oracle of Omaha” hiked his bet since September. Berkshire now owns 200.2 million shares of Occidental, worth $12.2 billion based on Tuesday’s close of $60.85.

    Occidental, now among Berkshire’s top 10 holdings, saw its stock retreat about 3% this year following a stellar 2022. The energy name was the best performer last year, more than doubling in price.

    Stock Chart IconStock chart icon

    Occidental

    On Monday, Occidental CEO Vicki Hollub said in an interview with CNBC’s Brian Sullivan that she met with the 92-year-old investor “just a few days ago.” Hollub said they talked about the oil and gas industry and the technology involved in it.

    In August, Berkshire received regulatory approval to purchase up to 50%, spurring speculation that it may eventually buy all of Houston-based Occidental.

    Berkshire also owns $10 billion of Occidental preferred stock, and has warrants to buy another 83.9 million common shares for $5 billion, or $59.62 each. The warrants were obtained as part of the company’s 2019 deal that helped finance Occidental’s purchase of Anadarko.

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  • Berkshire Hathaway fourth-quarter operating earnings fall 8%, cash hoard swells to nearly $130 billion

    Berkshire Hathaway fourth-quarter operating earnings fall 8%, cash hoard swells to nearly $130 billion

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    Warren Buffett.

    Gerald Miller | CNBC

    Berkshire Hathaway‘s operating profits fell during the fourth quarter as inflationary pressures weighed on the conglomerate’s businesses.

    Berkshire Hathaway’s operating earnings totaled $6.7 billion in the fourth quarter of 2022, a release read Saturday. That’s down 7.9% from the year-earlier period when profits totaled $7.285 billion. Operating earnings refers to the total profits made from the businesses owned by the conglomerate.

    Earnings from Berkshire’s railroad, utilities and energy businesses came in at $2.2 billion in the fourth quarter of 2022, which is slightly down from the year-ago period. Meanwhile, the firm’s insurance-underwriting business fell to $244 million in the fourth quarter of 2022, down from $372 million the year-earlier period.

    For the year, the conglomerate’s operating earnings totaled $30.793 billion. That’s up 12.2% from $27.455 billion in 2021.

    Meanwhile, Berkshire used $2.855 billion to buy back shares in the fourth quarter. That’s lower than the year-earlier period when share repurchases totaled more than $6 billion but more than the third quarter’s repurchase total of around $1 billion. For the year, Berkshire bought back nearly $8 billion in common stock.

    Despite this, Berkshire’s cash hoard grew to $128.651 billion in the fourth quarter of 2022. That’s up from nearly $109 billion in the third quarter.

    Buffett said in his annual shareholder letter that Berkshire will continue to hold a “boatload” of cash and U.S. Treasury bills along with its myriad of businesses. He specified that future CEOs in the company will have a “significant part” of their net worth in Berkshire shares.

    Stock Chart IconStock chart icon

    BRK in 2023

    “We will also avoid behavior that could result in any uncomfortable cash needs at inconvenient times, including financial panics and unprecedented insurance losses,” Buffett wrote. “And yes, our shareholders will continue to save and prosper by retaining earnings. At Berkshire, there will be no finish line.”

    Overall earnings dropped to $18.164 billion in the fourth quarter of 2022, a 54% decline from the same quarter in the year prior. These earnings reflect Berkshire’s fluctuating equity investments.

    For the full year, overall earnings tumbled 125% to a loss of $22.819 billion in 2022, down from earnings of $89.795 billion in 2021. That number is largely a byproduct of tumultuous 2022 market, with the company reporting a $53.6 billion loss from investments and derivatives.

    Regardless, Buffett often gives little weight to changes in the firm’s quarterly or annual results.

    “The amount of investment gains/losses in any given quarter is usually meaningless and delivers figures for net earnings (losses) per share that can be extremely misleading to investors who have little or no knowledge of accounting rules,” read a statement from the release.

    Berkshire shares are down nearly 1.6% in 2023.

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  • Warren Buffett is missing out on this year’s market comeback | CNN Business

    Warren Buffett is missing out on this year’s market comeback | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here.


    New York
    CNN
     — 

    Warren Buffett is arguably the most legendary investor of all time. But the Oracle of Omaha has missed out on this year’s stock market rally. So far, at least.

    Shares of Buffett’s Berkshire Hathaway

    (BRKB)     conglomerate, a company that owns businesses ranging from Geico and the Burlington Northern Santa Fe railroad to consumer brands like Dairy Queen, Duracell and Fruit of the Loom, are down slightly this year — lagging the market, as the S&P 500 is up 6%. (The Nasdaq has done even better, surging 12%.)

    Berkshire Hathaway also has a giant stock portfolio that Buffett helps run. Apple

    (AAPL)     is now by far the top holding for Berkshire, which also has big stakes in Bank of America

    (BAC)    , Chevron

    (CVX)    , American Express

    (AXP)     and Coca-Cola

    (KO)    .

    So is Berkshire’s portfolio, dare we say it, a little too boring? After all, if you want exposure to the big blue chips he owns, you could just buy an S&P 500 index fund.

    Buffett, in fact, has promoted that idea to investors many times, arguing that most individual stock pickers will not be able to beat the market. The 92-year-old Buffett, who has a net worth of more than $100 billion according to Forbes, even said that he wants the trustee in charge of his will to put 90% of his wife’s inheritance in index funds.

    Still, investors pay extremely close attention to Buffett every time he speaks. So traders will be poring over every word in his annual shareholder letter, which will be released the morning of Saturday, February 25, along with Berkshire’s latest earnings report.

    Don’t expect any major surprises. Buffett will probably continue to extol the virtues of a long-term, patient approach to investing and give a bullish outlook for the US economy. And to his credit, that usually pays dividends: Berkshire stock was up 3% last year in a down market.

    But market watchers are looking to see what Buffett says about the current inflationary scourge that has had a big impact on consumers and investors. He has lived through a couple of bouts of high inflation, after all.

    “I would like to hear Buffett address what’s going on with interest rates and inflation up as much they are,” said Steve Check, president of Check Capital Management, an investment firm that owns Berkshire shares. “He talked a lot about how concerned he was in the 1970s and 1980s.”

    Buffett has made numerous comments about inflation over the past few decades. And he was particularly nervous during the late 1970s and early 1980s, when soaring oil prices created an inflationary shock that severely hurt the economy.

    “High rates of inflation create a tax on capital that makes much corporate investment unwise,” Buffett said in his 1980 shareholder letter to Berkshire investors. Buffett also described inflation as a gigantic parasitic “tapeworm” for businesses in 1981.

    Buffett may also need to address how top-heavy and concentrated his portfolio has become. Berkshire’s five largest holdings make up about 75% of the company’s stock investments.

    “The portfolio is significantly overweight [in] technology, energy, consumer staples, and financials relative to the S&P 500,” said Bill Stone, chief investment officer with The Glenview Trust Company, another Berkshire shareholder, in a report. Stone noted that Berkshire also has big stakes in Kraft Heinz

    (KHC)     and oil company Occidental Petroleum

    (OXY)    .

    Investors also want to hear more about what Buffett plans to do with Berkshire’s massive pile of cash. The company has more than $100 billion on its balance sheet. Are more acquisitions coming?

    Buffett has talked for the past few years about how he’s longing to do an “elephant-sized” deal with Berkshire’s cash. Its most recent big deal was last year’s purchase of insurer Alleghany for $11.6 billion.

    Still, the recent sluggish performance of Berkshire’s stock is unlikely to deter the faithful Buffett fans, many of whom are expected to make the annual pilgrimage to Omaha on May 6 for the company’s shareholder meeting.

    Berkshire vice chairman Charlie Munger will likely be on stage with Buffett. So will Greg Abel, the chairman and CEO of Berkshire Hathaway Energy who Buffett has handpicked to eventually succeed him as Berkshire Hathaway CEO.

    Buffett’s faith in the US economy is well founded. American consumers have proven to be remarkably resilient despite rampant inflation. The surprisingly strong retail sales gains for January is further proof of that.

    Investors will get several more clues about consumer spending this week when several top retailers report earnings.

    Dow components Walmart

    (WMT)     and Home Depot

    (HD)     are the highlights. Walmart

    (WMT)    , which has a massive grocery business, should shed some light on how shoppers are coping with surging grocery prices.

    Walmart could still benefit from its reputation as a place for bargains, though. That could even attract more affluent shoppers looking to save a buck.

    “With inflation remaining elevated in the U.S., we expect Walmart to see continued trade-down benefits…particularly from higher-income customers,” said Arun Sundaram, an analyst at CFRA Research, in a report.

    And investors will be looking for clues about the health of the housing market when Home Depot reports. Placer.ai, a research firm that measures foot traffic at top retailers, said in a recent report that consumers are returning to Home Depot and rival Lowe’s at almost pre-pandemic levels — even despite the housing slowdown.

    One reason? Current homeowners may decide to spend more on renovations if they now plan to stick in their current house longer instead of looking to sell.

    “Although the hot home-buying market is cooling off…foot traffic remains close to pre-pandemic levels due to a shift towards projects aimed at sprucing up a current living space,” said Placer.ai’s Ezra Carmel in a report. “It appears that projects that enhance the prospect of staying in place also have the ability to drive visits.”

    Investors will be keeping close tabs on several other retailers set to report earnings this week, including TJX

    (TJX)     — the owner of TJ Maxx, Marshalls and HomeGoods — as well as online retailers eBay

    (EBAY)    , Etsy

    (ETSY)    , Overstock

    (OSTK)    , Wayfair

    (W)     and China’s Alibaba

    (BABA)    .

    The US government is also set to release personal spending figures for January on Friday, another data point that will give a glimpse of consumers’ financial health.

    Monday: US stock and bond markets closed for Presidents’ Day

    Tuesday: US existing home sales; Eurozone and UK PMI; earnings from Walmart, Home Depot, Medtronic

    (MDT)    , Fluor

    (FLR)    , Molson Coors

    (TAP)    , Caesars Entertainment

    (CZR)    , Diamondback Energy

    (FANG)    , Chesapeake Energy

    (CHK)    , Palo Alto Networks

    (PANW)    , Coinbase, La-Z-Boy

    (LZB)     and Hostess Brands

    (TWNK)

    Wednesday: Weekly crude oil inventories; earnings from Stellantis, Baidu

    (BIDU)    , TJX, Garmin

    (GRMN)    , Overstock, Wingstop

    (WING)    , Nvidia

    (NVDA)    , eBay, Etsy and Bumble

    Thursday: US weekly jobless claims; US Q4 GDP (second estimate); Eurozone inflation; Turkey interest rate decision; earnings from Alibaba, Netease

    (NTES)    , Keurig Dr Pepper

    (KDP)    , Wayfair, Newmont, Domino’s

    (DPZ)    , Papa John’s

    (PZZA)    , Yeti

    (YETI)    , Nikola, CNN owner Warner Bros. Discovery, Block

    (SQ)    , Booking Holdings

    (BKNG)    , Live Nation

    (LYV)    , Carvana

    (CVNA)    , Intuit

    (INTU)     and Beyond Meat

    (BYND)

    Friday: US personal income and spending; US PCE inflation figures; US new home sales; Japan inflation; Germany Q4 GDP; earnings from CIBC

    (CM)    , Scripps

    (SSP)     and Cinemark

    (CNK)

    Saturday: Berkshire Hathaway earnings and Warren Buffett annual shareholder letter

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  • Warren Buffett’s company sells major stake in Taiwanese chip giant TSMC | CNN Business

    Warren Buffett’s company sells major stake in Taiwanese chip giant TSMC | CNN Business

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    Taipei/Hong Kong
    CNN
     — 

    Shares in Taiwan Semiconductor Manufacturing Company fell as much as 4% on Wednesday, after Warren Buffett’s Berkshire Hathaway disclosed that it had sold most of its holdings in the chip giant.

    In a Tuesday filing with the United States’ Securities and Exchange Commission, Berkshire Hathaway

    (BRKA)     said it had about 8.3 million American depository shares of TSMC worth $618 million, having sold 86% of its shares. Just months before, in November, the company held about 60 million American depository shares of TSMC worth $4.1 billion, according to an SEC filing.

    Berkshire Hathaway did not provide a reason for the sale and did not immediately respond to a CNN request for comment. TSMC had no comment on the share sale.

    Shares in TSMC, which accounts for an estimated 90% of the world’s super-advanced computer chips, ended Wednesday more than 3% lower.

    Last month, the chipmaker posted strong quarterly and annual earnings, but gave a muted forecast on prospects for 2023 given the global slump in electronics demand because of rising inflation.

    Due to TSMC’s record earnings in 2022, its board approved on Tuesday the distribution of $121 billion New Taiwan Dollars ($4 billion) in performance-related bonuses and profit sharing to employees based in Taiwan.

    With nearly 65,000 employees on the island as of the end of last year, that would work out as an average of $62,000 per employee – if distributed equally.

    The board also approved a plan to inject up to $3.5 billion into the company’s subsidiary in Arizona, which will be part of a previously announced investment of $40 billion in the United States. TSMC announced last year that it’s building a second semiconductor factory in Phoenix and increasing its investment there.

    The world’s most important chipmaker, highly sought after by governments globally, is considering opening its first plant in Europe and a second one in Japan. TSMC’s global expansion comes as political tension has heightened between Washington and Beijing.

    Earlier this month, US Secretary of State Antony Blinken postponed a planned trip to China in response to the flying of a suspected Chinese spy balloon over the United States.

    In October, President Joe Biden’s administration imposed sweeping new curbs designed to curtail China’s access to technology critical to its growing military power.

    Last month, a Dutch maker of semiconductor equipment, ASML, told CNN that “rules are being finalized” on export controls to China, amid reports that the Netherlands and Japan have joined the United States in restricting sales of some computer chip machinery to the country.

    A few days later, multiple media outlets reported that Washington was moving to further restrict sales of American technology to Chinese tech giant Huawei.

    – CNN’s Chris Isidore and Michelle Toh contributed to this report

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  • Charlie Munger says the U.S. should follow in China’s footsteps and ban cryptocurrencies

    Charlie Munger says the U.S. should follow in China’s footsteps and ban cryptocurrencies

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    Charlie Munger at the Berkshire Hathaway press conference, April 30, 2022.

    CNBC

    Berkshire Hathaway Vice Chairman Charlie Munger urged the U.S. government to ban cryptocurrencies like China, saying a lack of regulation enabled wretched excess and a gambling mentality.

    “A cryptocurrency is not a currency, not a commodity, and not a security,” the 99-year-old Munger said in an op-ed published in the Wall Street Journal Wednesday evening.

    “Instead, it’s a gambling contract with a nearly 100% edge for the house, entered into in a country where gambling contracts are traditionally regulated only by states that compete in laxity,” Munger said. “Obviously the U.S. should now enact a new federal law that prevents this from happening.”

    Munger, along with his business partner Warren Buffett, have been longtime cryptocurrency skeptics, arguing that they are not tangible or productive assets. Munger’s latest comments came as the crypto industry was plagued with problems from failed projects to a liquidity crunch, exacerbated by the fall of FTX, once one of the world’s largest exchanges.

    The cryptocurrency market lost more than $2 trillion in value last year. The price of bitcoin, the world’ largest cryptocurrency, plunged 65% in 2022 and it has rebounded about 40% to trade around $23,824, according to Coin Metrics.

    The renowned investor said in recent years, privately owned companies have issued thousands of new cryptocurrencies, and they have become publicly traded without any governmental pre-approval of disclosures. Some has been sold to a promoter for almost nothing, after which the public buys in at much higher prices without fully understanding the “pre-dilution in favor of the promoter,” Munger said.

    Munger listed two “interesting precedents” that may guide the U.S. into sound action. Firstly, China has strictly prohibited services offering trading, order matching, token issuance and derivatives for virtual currencies. Secondly, from the early 1700s, the English Parliament banned all public trading in new common stocks and kept this ban in place for about 100 years, Munger said.

    “What should the U.S. do after a ban of cryptocurrencies is in place? Well, one more action might make sense: Thank the Chinese communist leader for his splendid example of uncommon sense,” Munger said.

    (Read the full piece in the WSJ here.)

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  • Justice Department tells bankers to confess their misdeeds to cut better enforcement deals

    Justice Department tells bankers to confess their misdeeds to cut better enforcement deals

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    U.S. prosecutor Marshall Miller (C), William Nardini (R) and Kristin Mace attend a news conference in Rome February 11, 2014.

    Tony Gentile | Reuters

    Banks and other corporations that proactively report possible employee crimes to the government instead of waiting to be discovered will get more lenient terms, according to a Justice Department official.

    The DOJ recently overhauled its approach to corporate criminal enforcement to incentivize companies to root out and disclose their misdeeds, Marshall Miller, a principal associate deputy attorney general, said Tuesday at a banking conference in Maryland.

    “When misconduct occurs, we want companies to step up,” Miller told the bank attorneys and compliance managers in attendance. “When companies do, they can expect to fare better in a clear and predictable way.”

    Banks, at the nexus of trillions of dollars of flows around the world daily, have a relatively high burden for enforcing anti-money laundering and other legal and regulatory requirements.

    But they have a lengthy track record of failures, often due to unscrupulous employees or bad practices.

    The industry has paid more than $200 billion in fines since the 2008 financial crisis, mostly tied to its role in the mortgage meltdown, according to a 2018 tally from KBW. Traders and bankers have also been blamed for manipulating benchmark rates, currencies and precious metal markets, stealing billions of dollars from developing nations, and laundering money for drug lords and dictators.

    The carrot that Justice officials are dangling before the corporate world includes a promise that companies that promptly self-report misconduct won’t be forced to enter a guilty plea, “absent aggravating factors,” Miller said. They will also avoid being assigned in-house watchdogs called monitors if they fully cooperate and bootstrap internal compliance programs, he said.

    Remember Arthur Andersen?

    The first incentive carries extra weight for financial firms because guilty pleas can cause catastrophic issues for the highly regulated entities; they could lose business licenses or the ability to manage client funds unless they’ve negotiated regulatory carveouts.

    “The message every corporation should hear is that the best way to avoid a guilty plea — for some companies, the only way to do so — is by immediately self-reporting and cooperating when misconduct is discovered,” Miller said.

    Officials have generally sought to avoid inadvertently triggering the collapse of companies with enforcement actions after the 2002 indictment of accounting firm Arthur Andersen led to 28,000 job losses.

    But that has meant that over the past decade, banks and other companies typically entered deferred prosecution agreements or other arrangements, coupled with fines, when misdeeds are found. For instance, JPMorgan Chase entered DPAs for its role in the Bernie Madoff pyramid scheme and a precious metals trading scandal, among other mishaps.

    Uber compliant

    Even in cases where problems aren’t immediately found, the Justice Department gives credit for managers who volunteer information to the authorities, Miller said. He cited the recent conviction of Uber‘s ex-chief security officer for obstruction of justice as an example of their current methods.

    “When Uber’s new CEO came on board and learned of the CSO’s conduct, the company made the decision to self-disclose all the facts regarding the cyber incident and the CSO’s obstructive conduct to the government,” he said. The move resulted in a deferred prosecution agreement.

    Companies will also be looked at favorably for creating compensation programs that allow for the clawback of bonuses, he said.

    The department-wide shift in its approach comes after a year-long review of its processes, Miller said.

    Crypto hint

    Miller also rattled off a list of recent cryptocurrency-related enforcement actions and hinted that the agency was looking at potential manipulation of digital asset markets. The recent collapse of FTX has led to questions about whether founder Sam Bankman-Fried will face criminal charges.

    “The department is closely tracking the extreme volatility in the digital assets market over the past year,” he said, adding a well-known quote attributed to Berkshire Hathaway‘s Warren Buffett about discovering misdeeds or foolish risk-taking “when the tide goes out.”

    “For now, all I’ll say is those who have been swimming naked have a lot to be concerned about, because the department is taking note,” Miller said.

    —With reporting from CNBC’s Dan Mangan

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  • Buffett donates over $750 million to his family charities

    Buffett donates over $750 million to his family charities

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    OMAHA, Neb. — Billionaire investor Warren Buffett donated more than $750 million in Berkshire Hathaway stock to the four foundations run by his family Wednesday, but unlike his annual gifts to charity each summer, the recipients didn’t include the Bill & Melinda Gates Foundation.

    Buffett has been making annual donations to the same five charities every year since 2006 when he unveiled a plan to give away his fortune over time, with the Gates Foundation receiving the biggest donations. Wednesday’s donations mark the first time the 92-year-old has made a second major gift within the same year.

    A filing with the Securities and Exchange Commission showed Buffett gave 1.5 million Class B shares in the Omaha, Nebraska-based conglomerate he leads to the Susan Thompson Buffett Foundation, named for his first wife. He also gave 300,000 Class B shares apiece to the three foundations run by his children: the Sherwood Foundation, the Howard G. Buffett Foundation and the NoVo Foundation.

    In June, he gave 11 million Class B shares to the Gates Foundation, 1.1 million B shares to the Susan Thompson Buffett Foundation and 770,218 shares apiece to his children’s three foundations.

    It wasn’t immediately clear what prompted the new donations this week, and Buffett didn’t immediately respond Wednesday to questions about them. The Gates Foundation and the Buffett family foundations that received the gifts also didn’t immediately respond to questions.

    The only other major change Buffett has made to his giving plans over the years came a decade ago when he significantly increased the amount pledged to the foundations his children run because he was pleased with what they had done with his money.

    The Susan Thompson Buffett Foundation keeps a low profile, but over the years it has been a major supporter of abortion rights, making large gifts to Planned Parenthood and other groups. Buffett hasn’t announced any changes in his giving plans since the U.S. Supreme Court overturned Roe v. Wade earlier this year.

    Susie Buffett, 69, uses her Sherwood Foundation to strengthen early childhood education and support a number of projects around Buffett’s hometown of Omaha where she also lives. Howard Buffett, 67, is helping farmers in impoverished nations produce more and working to end world hunger with his namesake foundation. Peter Buffett, 64, has dedicated his NoVo Foundation to empowering women and girls worldwide through education, collaboration and economic development to end violence against women.

    Even after these latest gifts, Buffett still controls more than 31% of Berkshire’s voting power.

    Berkshire Hathaway is an eclectic conglomerate that owns more than 90 companies including BNSF railroad, Geico insurance, several major utilities and an assortment of manufacturing and retail firms including Precision Castparts, Dairy Queen and Helzberg Diamonds. In addition to the companies it owns outright, Berkshire owns major investments in Apple, Bank of America, Coca-Cola and other companies.

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  • What the Club is watching Tuesday — more cooler inflation, Dow stock earnings, price target hikes

    What the Club is watching Tuesday — more cooler inflation, Dow stock earnings, price target hikes

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    U.S. stock futures point to strong Wall Street open Tuesday as another government report points to slowing inflation.

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  • Warren Buffett’s Berkshire Hathaway sells $3.8 billion of longtime holding U.S. Bancorp

    Warren Buffett’s Berkshire Hathaway sells $3.8 billion of longtime holding U.S. Bancorp

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  • Warren Buffett’s firm reports $2.7B loss on investment drop

    Warren Buffett’s firm reports $2.7B loss on investment drop

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    OMAHA, Neb. — Warren Buffett’s company again reported a loss — this time only $2.7 billion — because of a drop in the paper value of its investment portfolio in the third quarter, but most of its operating businesses performed well with the notable exception of Geico.

    Berkshire Hathaway reported a quarterly loss Saturday of $2.7 billion, or $1,832 per Class A share. That’s down from a $10.3 billion profit, or $6,882 per Class A share, a year ago when the stock market was soaring. In the second quarter of this year, Berkshire reported a $44 billion loss.

    Buffett has long said he believes Berkshire’s operating earnings are a better measure of the company’s performance because they exclude investment gains and losses, which can vary widely quarter to quarter. By that measure, Berkshire’s operating earnings jumped 20% to $7.76 billion, or $5,293.83 per Class A share. That’s up from $6.47 billion, or $4,330.60 per Class A share.

    The four analysts surveyed by FactSet expected Berkshire to report operating earnings per Class A share of $4,205.82 on average.

    Berkshire said its revenue grew 9% to $76.9 billion.

    Most of Berkshire’s eclectic assortment of more than 90 companies performed well during the quarter, but the key insurance unit of Geico reported a pre-tax underwriting loss of $759 million as the cost of auto claims soared along with the prices of used cars and car parts. Geico has been hampered by soaring costs since the second half of last year.

    Geico did increase its rates by 5.4% during the quarter, but that was almost entirely offset because it lost 4.6% of its customers.

    Another notable weak spot in the results was that BNSF railroad’s profit declined 6% to $1.44 billion as it hauled 5% less freight the cost of fuel soared and salary costs were adjusted up to reflect the raises railroads have agreed to pay their workers in tentative agreements with their 12 unions. Most of BNSF’s peers reported significant increases in profits during the quarter.

    Berkshire said its insurance units recorded after tax losses of $2.7 billion related to Hurricane Ian. That compares with $1.7 billion in catastrophic losses a year ago related to Hurricane Ida and major floods in Europe.

    Berkshire is sitting on nearly $109 billion cash even though it has been actively investing in the stock market this year, including putting more than $51 billion to work in the first quarter. That is up slightly from the $105.4 billion it held at the end of the second quarter because Berkshire’s businesses generated more cash than it spent. Although after the end of the third quarter, Berkshire did spend $11.6 billion in October to complete its acquisition of the Alleghany insurance conglomerate.

    Buffett’s biggest stock investments this year included buying roughly $12 billion worth of Occidental Petroleum stock and about $20 billion worth of Chevron shares. Besides those oil sector investments, Berkshire also bought more than 120 million shares of printer maker HP Inc. and bet big that Microsoft’s acquisition of Activision Blizzard will go through by buying nearly 70 million shares of the video game maker.

    Berkshire’s investment portfolio also includes major stakes in Apple, American Express, Bank of America and Coca-Cola stock.

    The Omaha, Nebraska, based conglomerate’s companies include manufacturing firms like aviation parts maker Precision Castparts and specialty chemical maker Lubrizol, retail firms like See’s Candy, Dairy Queen and Helzberg Diamonds and other companies like NetJets.

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