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Tag: Warren Buffett

  • Introvert Warren Buffett Reveals Secret to Public Speaking | Entrepreneur

    Introvert Warren Buffett Reveals Secret to Public Speaking | Entrepreneur

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    Most people (56.8%) around the world identify as introverts, according to a 2020 study from The Myers-Briggs Company. Those with an introverted personality are often reflective and self-aware, prefer to write rather than speak and feel tired after being in a crowd.

    Naturally, many introverts aren’t big fans of public speaking. Addressing an audience might be an inevitable part of professional life, but the average introvert probably isn’t clamoring to get in front of a group.

    Related: I Work With Warren Buffett. He’s Probably the Smartest Person in the World — Here’s the Best Advice He’s Given Me.

    Even the most successful business leaders in the world aren’t immune to stage fright.

    Warren Buffett, the 94-year-old billionaire chairman and CEO of conglomerate holding company Berkshire Hathaway, considers himself an introvert. In his biography The Snowball: Warren Buffett and the Business of Life by Alice Schroeder, he admits that speaking in front of a crowd used to make him physically ill.

    Image Credit: Chip Somodevilla | Getty Images. Warren Buffett.

    “I was terrified of public speaking,” Buffett says. “You can’t believe what I was like if I had to give a talk. I was so terrified that I just couldn’t do it. I would throw up. In fact, I arranged my life so that I never had to get up in front of anybody.”

    Related: In Leadership, Introversion Is Underrated — and Warren Buffett and Bill Gates Share How They Use It to Their Advantage.

    After Buffett graduated from Columbia Business School, where he studied under investor Benjamin Graham, he returned to Omaha, Nebraska. There, he saw an advertisement for a public speaking course using the Dale Carnegie method.

    Buffett was familiar with Carnegie’s 1936 self-help book How to Win Friends & Influence People, and he’d even signed up for a Carnegie public speaking class in New York — before he backed out and stopped payment on the $100 check.

    Buffett decided to give the course another chance in Omaha.

    “I took a hundred bucks in cash and gave it to Wally Keenan, the instructor, and said, ‘Take it before I change my mind,’” he recalls in The Snowball.

    Related: 5 Mega-Successful Entrepreneurs Who Are Introverts

    In Keenan’s class at Omaha’s Rome Hotel, Buffett discovered the key to conquering his public speaking fears.

    “The way it works is that you learn to get out of yourself,” Buffett explains. “I mean, why should you be able to talk alone with somebody five minutes before and then freeze in front of a group? So they teach you the psychological tricks to overcome this. Some of it is just practice — just doing it and practicing.”

    Practicing under the same conditions in which you’ll speak or otherwise perform can help promote success in high-pressure situations, Sian Beilock, cognitive scientist and current president of Dartmouth College, told Entrepreneur in 2022.

    Related: Steve Jobs’ Public Speaking Power Moves Remain Just as Relevant Today, 13 Years After His Final Keynote at the Apple Developers Conference

    Additionally, it can help to take a step back as the event draws near, according to Beilock. Then, during the high-stakes moment, she suggests interpreting physiological responses positively; for example, consider sweaty palms or a racing heart signs of excitement rather than anxiety.

    “And it worked,” Buffett says of the psychological techniques he learned in his public speaking class many decades ago. “That’s the most important degree that I have.”

    Buffett‘s certification of completion for the Carnegie course, dated January 1952, hangs above the sofa in his office, according to Schroeder’s account.

    Related: I Spent a Day Living Like Billionaire Warren Buffett. Here’s What Happened.

    Now, Buffett stands in front of an audience of 40,000 at Berkshire Hathaway’s annual shareholder meeting, where attendees line up hours before the event to listen to the Oracle of Omaha speak.

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    Amanda Breen

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  • Bill Gates Says Billionaires Like Him Should Be Taxed Two-Thirds of Their Fortunes

    Bill Gates Says Billionaires Like Him Should Be Taxed Two-Thirds of Their Fortunes

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    The Microsoft co-founder has long been one of the world’s wealthiest people. Yi-Chin Lee/Houston Chronicle via Getty Imag

    Bernie Sanders, the famously anti-billionaire senator of Vermont, and Bill Gates, the world’s seventh wealthiest person with an estimated net worth of $138.5 billion, make an unlikely pairing—especially when it comes to debating income inequality. Despite their differences, the duo sat down together to discuss wealth and taxation for the latest episode of Gates’ new Netflix series What’s Next? The Future with Bill Gates.

    “Several of my friends raised an eyebrow when I told them I was going to meet with him,” said Gates in a blog post on Wednesday (Sept. 18) discussing his meeting with Sanders and the show, which aired the same day. “After all, Sen. Sanders is the first U.S. Senator in history to go on record saying that billionaires shouldn’t exist,” he added.

    Sanders maintained this stance during their discussion, calling the existence of ultra-wealthy individuals “unacceptable” and “obscene.” Gates, meanwhile, suggested that billionaires should voluntarily donate their wealth but disagreed on outlawing them altogether. “But again, I’m biased,” conceded the Microsoft (MSFT) co-founder. Gates, who has given away some $77.6 billion via the Gates Foundation, has long been a champion for billionaire philanthropy and in 2010 helped create the Giving Pledge, a campaign that urges the ultra-wealthy to donate the majority of their wealth.

    How much should the ultra-rich be taxed?

    Despite their different stances on banning billionaires, both Gates and Sanders are advocates for higher taxes on the rich. “I’m amazed that the rich aren’t taxed substantially more than they are,” said Gates during the episode. “If you raise taxes a fair bit, there should be enough to somewhat raise the social safety net, which is not as well-funded as I would make it,” he added. The centibillionaire said his ideal tax system would leave the wealthy with a third of their current fortunes, which would give Gates around $46 billion given his current fortune. Sanders, meanwhile, said he “would go a lot further.”

    Gates’ comments echo statements he made earlier this month in an interview with The Independent, where he voiced his desire for more progressive tax policies. “If I designed the tax system, I would be tens of billions of dollars poorer than I am,” he told the outlet.

    In a 2019 blog post, Gates suggested increasing taxes on large investments by the wealthy and urged the U.S. government to raise the capital gains tax to equal taxes on labor. While those relying on salary and hourly work are taxed at a maximum of 37 percent, “the wealthiest generally only get a tiny percentage of their income from a salary; most of it comes from profits on investments, such as stock or real estate, taxed at 20 percent if they’re held for more than a year,” he said.

    During his discussion with Gates, Sanders pointed to a similar idea proposed by Warren Buffett in 2011 when he criticized the fact that he was taxed less than his employees. “That is not what the American people want to see,” said the senator.

    Earlier this year, JPMorgan Chase (JPM)’s Jamie Dimon—estimated to be worth $2.3 billion—said that higher taxes on the rich would help the nation bring its debt down while increasing economic spending and growth. “You would maybe just raise taxes a bit, like the Warren Buffett-type of rule,” Dimon told PBS, referring to a tax rule borne out of Buffett’s comments that dictates no households earning more than $1 million annually should pay a smaller share of their income in taxes than middle-class families.

    Bill Gates Says Billionaires Like Him Should Be Taxed Two-Thirds of Their Fortunes

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    Alexandra Tremayne-Pengelly

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  • CNBC Daily Open: Looking past sticky core inflation

    CNBC Daily Open: Looking past sticky core inflation

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    Prices are displayed in a store window in Brooklyn on August 14, 2024 in New York City. 

    Spencer Platt | Getty Images News | Getty Images

    This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    Stubborn core inflation
    Prices in the U.S. rose 0.2% in August, the Bureau of Labor Statistics reported, in line with the Dow Jones consensus. The 12-month inflation rate was at 2.5%, the lowest since February 2021. However, core CPI, which excludes food and energy prices, ticked up 0.3%, 10 basis points higher than expected.

    Choppy trading
    Major U.S. indexes closed higher in a choppy session on Wednesday, lifted by technology stocks. The regional Stoxx 600 index ended the day flat following volatile trading. Country-specific indexes were mixed, however. Germany’s DAX added 0.35% while France’s CAC 40 lost 0.14%.

    Oracle shares jump
    Oracle’s shares have surged by double-digit percentages following its earnings reports so far this year. After Oracle popped 11% on Tuesday, the company’s share prices are up 49% year to date, second only to Nvidia’s 136%. “After 13 years of single-digit organic total revenue growth, Oracle is reaccelerating into the double digits,” said JMP analysts.

    Buffett sells more BofA
    Berkshire Hathaway isn’t done selling Bank of America shares. Warren Buffett’s conglomerate sold 5.8 million BofA shares on Friday, Monday and Tuesday, netting around $228.7 million for them. BofA dropped to Berkshire’s third-biggest holding, having long occupied the second spot.

    [PRO] Nothing to short here
    Bank stocks fell on Tuesday on fears of a slowdown in the sector. However, Steve Eisman, senior portfolio manager at Neuberger Berman, said he was not worried about the health of banks — or the economy, for that matter. And when the person who spotted the weakness in subprime mortgage loans speaks, it’s good to listen to him.

    The bottom line

    On the surface, Wednesday looked like a great day for investors.

    The S&P 500 climbed 1.07%, the Dow Jones Industrial Average added 0.31% and the Nasdaq Composite shot up 2.17%.

    However, those numbers are hiding turmoil under their pretty facades.

    The S&P dropped around 1% during trading but eventually managed to claw back losses and close more than 1% higher by the end of the day. It’s the first time the broad-based index has done so since October 2022.

    The consumer price index for August precipitated the initial fall. Core inflation, to which the Fed pays more attention because it more accurately reflects price movements, came in a bit higher than expected for the month.

    Core inflation was higher than the headline number because food and energy prices are stripped out from the former. And both were mild for the month: Food prices were only 0.1% higher, suggesting no pets need to be eaten, while energy costs fell 0.8%.

    Still, that data means the Fed’s unlikely to make a jumbo-sized 50-basis-point cut. Disappointment translated into stocks dropping.

    Even with inflation remaining difficult to tame, it doesn’t mean consumers are worse off. Real earnings rose 0.2% for the month, showed a separate Bureau of Labor Statistics report, which means the rise in income outstripped price increases.

    That might have helped the intraday rebound in the S&P.

    As for the Nasdaq, it was buoyed by technology stocks, which experienced a huge bounce from the previous days’ falls. Nvidia popped 8%, probably on news the U.S. might let the chipmaker sell advanced chips to Saudi Arabia, according to Reuters.

    But there might be more choppiness ahead in markets. The U.S. government is, once again, close to a shutdown because of politicking over government funding. It’s almost like the U.S. House of Representatives has no concept of a plan.  

    – CNBC’s Jeff Cox, Pia Singh and Lisa Kailai Han contributed to this story.

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  • Billionaire Bill Gates Has 83% of His $48 Billion Portfolio in Just 4 Stocks

    Billionaire Bill Gates Has 83% of His $48 Billion Portfolio in Just 4 Stocks

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    Most investors have probably heard of Bill Gates, best known as a billionaire philanthropist and co-founder of Microsoft (NASDAQ: MSFT).

    After heading up the technology company he founded for more than 25 years, the former CEO stepped down to focus on his charity work. Gates is worth an estimated $132.6 billion (as of this writing), according to Forbes, making him the ninth richest person in the world. However, the fabled billionaire has pledged that “the vast majority of my wealth would go toward helping as many people as possible.”

    The vehicle he uses to support that goal is the Bill & Melinda Gates Foundation Trust. “Our mission is to create a world where every person has the opportunity to live a healthy, productive life,” the Gates Foundation website declares. The foundation has made grant payments of $77.6 billion since its inception, “taking on the toughest, most important problems.” As a result, holdings of the Trust tend to vary from quarter to quarter.

    While the Trust continues to own stakes in more than two dozen companies, 83% of its portfolio was comprised of just four stocks at the close of the second quarter.

    A person staring at graphs and charts on a computer monitor.

    Image source: Getty Images.

    1. Microsoft: 33%

    Of all the holdings in the Gates Trust, Microsoft is by far the largest. This shouldn’t be a surprise, given that Gates set up the foundation with his own holdings. The Trust owns roughly 35 million shares of Microsoft stock valued at $14.7 billion.

    Yet this isn’t the Microsoft of old. The company has expanded beyond its browser and operating system software, with Azure Cloud becoming the fastest-growing cloud infrastructure provider. It’s up 29% year over year in the most recent quarter, outpacing both Amazon Web Services (AWS) and Alphabet‘s Google Cloud.

    However, it was Microsoft’s early move into generative AI that has investors most excited. Management noted that Azure’s cloud growth included “eight points from AI services,” helping illustrate the upside. The company’s AI-powered digital assistant — Copilot — and other AI tools could generate incremental revenue of $143 billion by 2027, according to analysts at Evercore ISI.

    The Trust also benefits from Microsoft’s quarterly dividend, which the company has paid out consistently since 2004 and increased every year since 2011. The current yield of 0.7% might seem inconsequential, but that’s a function of the impressive stock price gains of more than 200% over the past five years. Furthermore, with a payout ratio of less than 25%, there are likely many more dividend increases on the horizon.

    2. Berkshire Hathaway: 21%

    Fellow billionaire Warren Buffett, CEO of Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), has similar plans to donate the bulk of his wealth to charity. He joined Gates in the “Giving Pledge” in 2006 and has since donated roughly $43 billion to the Trust, including a bequest of $4 billion in June. As a result, the Gates Foundation currently holds nearly 25 million Berkshire Hathaway Class B shares worth $11 billion.

    Given Berkshire’s portfolio of profitable businesses and successful stock holdings, it isn’t surprising that the Trust continues to keep so much of the stock on hand. The portfolio provides built-in diversification and is expected to rake in billions in dividend income over the coming year. Furthermore, Berkshire just pared down its stock holdings and boosted its cash pile to a record high. It’s now holding roughly $277 billion in cash.

    Given the company’s history of success and massive cash pile, it isn’t surprising that it’s still one of the Trust’s largest holdings.

    3. Waste Management: 16%

    Gates has a soft spot for boring companies with strong recurring revenue, which is the very definition of Waste Management (NYSE: WM). If you have any doubt, consider this: The Gates Trust has a stake of more than 35 million shares of Waste Management stock worth $7.3 billion.

    Beyond just trash collection, Waste Management owns a number of reclamation stations that recover glass, paper, metal, and plastics and redirect them for recycling. The company also operates a number of landfills where it collects landfill gases to generate electricity and power vehicles.

    In the second quarter, revenue grew 5.5% year over year, while its adjusted operating EBITDA increased 10%.

    Let’s not forget the dividend. Waste Management has increased its payout for 15 consecutive years, with a current yield of 1.43%. And with a payout ratio of 46%, there’s plenty more where that came from.

    4. Canadian National Railway: 13%

    Another area where Gates and Buffett share common ground is enduring faith in railroads. Buffett was clear when he bought out Burlington Northern Santa Fe in 2009, saying that railroads transported goods “in a very cost-effective way… they do it in an extraordinarily environmentally friendly way… [releasing] far fewer pollutants into the atmosphere.” Gates clearly shares this mindset, as the Trust holds nearly 55 million shares of Canadian National Railway (NYSE: CNI) worth $6.2 billion.

    What sets Canadian National apart is that it’s the only transcontinental railroad in North America, connecting the Atlantic coast, the Pacific coast, and the Gulf of Mexico. Regarding Buffett’s point, railroads reduce greenhouse gas emissions by 75%. This is primarily because they’re four times more efficient than long-haul trucks, making railroads a more cost-effective option. Add to that their high barriers to entry and significant economic moat, and it’s easy to understand the appeal.

    Canadian National has a solid track record of dividend payments, with consecutive increases every year since it was initiated in 1996, and a current yield of 2.1%. The current payout ratio of 38% suggests there’s plenty of opportunity for future increases.

    Should you invest $1,000 in Microsoft right now?

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    John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Danny Vena has positions in Alphabet, Amazon, Canadian National Railway, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Berkshire Hathaway, and Microsoft. The Motley Fool recommends Canadian National Railway and Waste Management and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

    Billionaire Bill Gates Has 83% of His $48 Billion Portfolio in Just 4 Stocks was originally published by The Motley Fool

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  • If Warren Buffett’s Son Didn’t Sell His 90K Berkshire Hathaway Inheritance 47 Years Ago To ‘Buy Time,’ He Would Have This Much Today

    If Warren Buffett’s Son Didn’t Sell His 90K Berkshire Hathaway Inheritance 47 Years Ago To ‘Buy Time,’ He Would Have This Much Today

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    If Warren Buffett’s Son Didn’t Sell His 90K Berkshire Hathaway Inheritance 47 Years Ago To ‘Buy Time,’ He Would Have This Much Today

    Peter Buffett, the son of legendary investor Warren Buffett, made a life-altering decision 47 years ago when he traded his inheritance “to buy time.” Although he missed out on what could have been hundreds of millions of dollars in profit, he stands by his choice, confident that his father would agree.

    Don’t Miss:

    Finding His Path: At 19, Buffett received a portion of the proceeds from the sale of his grandfather’s farm, which his father invested in Berkshire Hathaway Inc. (NYSE:BRK) (NYSE:BRK), amounting to $90,000, according to CNBC. His father made it clear that this was all the financial support he would receive for personal use. Despite knowing it was his entire inheritance, Peter sold his Berkshire stock to fund his passion for music.

    See Also: Don’t miss out on the next Nvidia – you can invest in the future of AI for only $10.

    Buffett dropped out of Stanford University, purchased a modest studio apartment in San Francisco, and invested in upgrading his recording equipment. He dedicated his time to honing his piano and music production skills.

    His big break came unexpectedly when a neighbor asked him about his profession, setting him on the path to a successful career in music.

    Trending: Mark Cuban believes “the next wave of revenue generation is around real estate and entertainment” — this new real estate fund allows you to get started with just $100.

    He told the neighbor that he was a “struggling composer” and the neighbor offered to introduce him to his son-in-law who was an animator looking for ad tunes for a new cable station — it turned out to be MTV.

    Buffett is now 66 years of age and has released around 15 studio albums over his successful career.

    Trending: This Jeff Bezos-backed startup will allow you to become a landlord in just 10 minutes, and you only need $100.

    The Path Not Taken: If the son of the legendary investor would have stayed in college and held onto his $90,000 investment in Berkshire Hathaway, it would be worth over $400 million today.

    “But I didn’t make that choice and I don’t regret it for a second. I used my nest egg to buy something infinitely more valuable than money: I used it to buy time,” Buffett said.

    That’s a decision that his father would be proud of, he noted. The billionaire taught his son that work isn’t about making as much money as possible, instead it’s about doing something that you love to do.

    Trending: How do billionaires pay less in income tax than you? Tax deferring is their number one strategy.

    Buffett acknowledged that the money was a privilege, calling it a gift that he had not earned.

    “Without those hundreds of unpaid hours spent fiddling with my recording gear, I would not have found my sound or approach,” Buffett said.

    The musician used the money to buy time to pursue something that he enjoys waking up and doing each day, which is exactly what his father tells young people to do. The billionaire has previously recommended that people pursue careers they would want even if money was not part of the decision-making process.

    Check This Out:

    This story is part of a new series of features on the subject of success, Benzinga Inspire. Some elements of this story were previously reported by Benzinga and it has been updated.

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    This article If Warren Buffett’s Son Didn’t Sell His 90K Berkshire Hathaway Inheritance 47 Years Ago To ‘Buy Time,’ He Would Have This Much Today originally appeared on Benzinga.com

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  • Prediction: This Stock Will Be Warren Buffett’s Top Performer by 2030

    Prediction: This Stock Will Be Warren Buffett’s Top Performer by 2030

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    Everyone knows about Warren Buffett’s monster Apple (NASDAQ: AAPL) investment. The huge hundred-billion-dollar winner — which Buffett recently trimmed — is quoted time and time again as one of Berkshire Hathaway‘s best investments. However, the investment has been held for fewer than 10 years, while Buffett has been investing for more than 60.

    Buffett has bought and held American Express (NYSE: AXP) for many years longer than Apple. And yet few people discuss this huge winning investment. Even though the stock is up over tenfold since Buffett’s initial purchase, shares still look cheap today. Here’s why American Express is poised to crush the market again and can be Buffett’s top performer through 2030.

    American Express: One of Buffett’s favorite brands

    American Express operates one of the only credit card networks around the world. However, unlike other networks like Visa and Mastercard, American Express acts as the bank and actually issues its own credit cards. This vertically integrates digital payments, making American Express a unique business in the credit card world.

    Catering to wealthier clientele, the company has built a premium brand that has been honed for decades. It offers high-fee credit cards such as the American Express platinum card, which has an annual fee of $695 a year. People are willing to pay these fees for the large travel benefits, cash-back deals, and other perks of the American Express ecosystem. As a classic network effect, it would be virtually impossible to rip and replace American Express from the payments ecosystem, making it a wide-moat business.

    Buffett loves top brands such as American Express, Apple, and Coca-Cola. It is no surprise then to see Berkshire Hathaway still own over 20% of the business. It made its first investment back in 1991. Since then, American Express has posted a total return of close to 8,000%, which is better than Coca-Cola over that same time frame.

    Growing card members, expanding international acceptance

    Around 10 years ago, American Express went through a rough patch. It struggled to gain new users and lost a huge contract for the Costco Wholesale credit card partnership.

    Since then, with new management at the helm, the company has set itself back on the right rack. Total cardmembers are growing again and have been for several years. Last quarter, the company added 3.3 million new cards, accelerating from a 3 million gain in the same quarter a year ago. New cards are the lifeblood of American Express’ business, so it is great to see new customers joining the platform. Over the next decades, these customers should provide a ton of value to American Express’ business as these wealthy customers make purchases with these cards and pay the high annual fees.

    To keep up this growth, American Express is investing aggressively to grow the number of places that accept American Express card payments. This is the other lifeblood of the payments business. If a merchant doesn’t accept your credit card as a form of payment, you don’t make any money because shoppers can’t use their cards to make the purchase. Since 2017, the company has grown its international accepting locations fourfold, which will drive even more payments growth in the coming years. It has virtual acceptance parity with Visa and Mastercard in the United States today.

    AXP PE Ratio Chart

    AXP PE Ratio Chart

    Buy this ultimate dividend grower and never sell

    Through increased card fees, payment volume, international acceptance, and more credit card loans, American Express believes it can grow its revenue by 10% annually over the long term. Management thinks earnings per share (EPS) can grow even faster.

    This growth — if you agree with management — will give American Express a ton of capacity to grow its dividend payments. The stock currently has a dividend yield of 1.23%, which looks quite low. But the stock is not wildly expensive and trades at a below-market price-to-earnings (P/E) ratio of 17. Over the last 10 years, American Express’ dividend per share has grown by 165%.

    If revenue and earnings keep growing at 10% or more, I think that the stock can more than double its dividend per share again by 2030. Combined with a low starting valuation, I think American Express can be Buffett’s top-performing stock from now until 2030.

    Should you invest $1,000 in American Express right now?

    Before you buy stock in American Express, consider this:

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    *Stock Advisor returns as of August 6, 2024

    American Express is an advertising partner of The Ascent, a Motley Fool company. Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, Mastercard, and Visa. The Motley Fool recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.

    Prediction: This Stock Will Be Warren Buffett’s Top Performer by 2030 was originally published by The Motley Fool

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  • Warren Buffett’s Berkshire Hathaway sold nearly half its stake in Apple

    Warren Buffett’s Berkshire Hathaway sold nearly half its stake in Apple

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    Warren Buffett walks the floor and meets with Berkshire Hathaway shareholders ahead of their annual meeting in Omaha, Nebraska on May 3rd, 2024. 

    David A. Grogan

    Warren Buffett’s Berkshire Hathaway dumped nearly half of its gigantic Apple stake last quarter in a surprising move for the famously long-term-focused investor.

    The Omaha-based conglomerate disclosed in its earnings filing that its holding in the iPhone maker was valued at $84.2 billion at the end of the second quarter, suggesting that the Oracle of Omaha offloaded a little more than 49% of the tech stake. Even after the selling Apple remains the largest stock stake by far for Berkshire.

    The Apple share sale comes amid a broader pattern of selling by Buffett in the second quarter as Berkshire unloaded more than $75 billion in equities in the period, raising the conglomerate’s cash fortress to a record $277 billion.

    Buffett had trimmed the Apple stake by 13% in the first quarter and hinted at the Berkshire annual meeting in May that it was for tax reasons. Buffett noted that selling “a little Apple” this year would benefit Berkshire shareholders in  the long run if the tax on capital gains is raised down the road by a U.S. government wanting to plug a climbing fiscal deficit.

    But the magnitude of this selling suggests it could be more than just a tax-saving move.

    After declining in the first quarter on concerns it was falling behind on artificial intelligence innovation, Apple shares took off in the second quarter, gaining 23% to a new record as it gave more detail to investors about its future in artificial intelligence.

    Why the selling?

    It won’t be clear exactly why Buffett is selling down the holding Berkshire first bought more than eight years ago, whether company reasons, market valuation or because of portfolio management concerns (Buffett typically doesn’t want a single holding to grow too large). Berkshire’s Apple holding was once so big that it took up half of its equity portfolio.

    Stock Chart IconStock chart icon

    Apple

    The 93-year-old investor largely avoided technology companies for most of his career before Apple. Berkshire began buying the stock in 2016 under the influence of Buffett’s investing lieutenants Ted Weschler and Todd Combs. Over the years, Buffett grew so fond of Apple that he increased the stake drastically to make it Berkshire’s biggest and called the tech giant the second-most important business after his cluster of insurers.

    Buffett has been on a bit of a selling spree as of late with his top holdings. Buffett recently starting downsizing his second biggest stake — Bank of America, shedding $3.8 billion worth of the bank shares after a 12-day selling spree.

    Overall, the quarterly report showed Buffett dumping stock last quarter, which saw the S&P 500 rise to a record in anticipation of a “soft landing” for the U.S. economy. That soft landing was called into question this week with Friday’s weaker-than-expected July jobs report.

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  • Warren Buffett’s Berkshire Hathaway slashes Apple stake by almost 50%

    Warren Buffett’s Berkshire Hathaway slashes Apple stake by almost 50%

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    Investor Warren Buffett ‘s company recorded a $47 billion gain on stock sales during the second quarter as he slashed Berkshire Hathaway’s massive Apple stake, but a drop in the paper value of its remaining investments drug down earnings despite improvements in the myriad companies it owns.

    Selling off a big chunk of its Apple holdings was the quarter’s biggest news — Buffett once called the company’s stake in the iPhone maker a pillar of Berkshire’s business that he intended to hold indefinitely. The other major investment moves Buffett made during the quarter included continued cuts to its investment in Chinese EV maker BYD and selling off some of its Bank of America stock.

    Berkshire didn’t give an exact count of its Apple shares in Saturday’s report, but it estimated the investment was worth $84.2 billion at the end of the second quarter even though shares soared over the summer as high as $237.23. At the end of the first quarter, Berkshire’s Apple stake was worth $135.4 billion.

    Berkshire said it earned $30.348 billion, or $21,122 per Class A share, during the second quarter. That’s down from $35.912 billion, or $24,775 per A share, a year ago when the paper value of its investment portfolio was up $24.2 billion.

    This year the value of the investments Berkshire continues to hold fell $28.2 billion.

    Buffett has long cautioned investors that it’s better to look at Berkshire’s operating earnings when judging its performance because those figures exclude investment gains and losses which can vary widely from quarter to quarter.

    By that measure, Berkshire’s operating earnings grew more than 15% to $11.598 billion, or $8,072.16 per Class A share, from $10.043 billion, or $6,928.40 per Class A share, a year ago. Geico led the improvement of Berkshire’s businesses while many of its other companies that are more sensitive to the economy reported lackluster results.

    The results easily topped the $6,530.25 earnings per share that four analysts surveyed by FactSet Research predicted.

    Berkshire owns an assortment of insurance businesses along with BNSF railroad, several major utilities and a varied collection of retail and manufacturing businesses, including brands like Dairy Queen and See’s Candy.

    Earlier this year, The New York Stock Exchange said it had resolved a technical problem that had Class A shares of Berkshire Hathaway seemingly down almost 100%. 

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  • Buffett Cuts BofA Stake Again, Unloading $3 Billion This Month

    Buffett Cuts BofA Stake Again, Unloading $3 Billion This Month

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    (Bloomberg) — Warren Buffett’s Berkshire Hathaway Inc. disclosed its third disposal of Bank of America Corp. shares this month — paring its massive, profitable bet on the lender by a total of more than $3 billion.

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    The conglomerate, which started building an investment in the bank in 2011 and has long reigned as the top shareholder, sold $767 million of the stock from July 25 to July 29, according to a regulatory filing Monday. That and prior sales this month reduced Berkshire’s stake by a total of 6.9%.

    Still, Berkshire holds almost 962 million shares, the filing shows — worth $39.5 billion at Monday’s closing price.

    The sales mark Buffett’s biggest pullback from a bet that has long served as a prominent vote of confidence in the stewardship of Bank of America Chief Executive Officer Brian Moynihan. The legendary 93-year-old investor is cashing out with the price up 22% this year.

    Representatives for Berkshire and Bank of America didn’t respond to messages seeking comment outside normal business hours.

    Buffett initially plowed $5 billion into Charlotte, North Carolina-based Bank of America at a dark time. The company was facing mounting legal liabilities after the 2008 financial crisis, and shareholders were growing anxious about the toll that was taking on its capital.

    Buffett has said he was in the bathtub when he came up with the idea of intervening, arranging to acquire preferred stock and the right to buy common shares. His imprimatur quelled public doubts and soon sent the stock higher, creating a massive paper profit.

    Berkshire kept investing in Bank of America in the decade that followed, eventually seeking regulatory approval to amass a stake surpassing 10%. Last year, as Buffett adjusted financial-industry bets and exited some, he called out Bank of America as one to keep.

    “I like Brian Moynihan enormously,” he said that April. “I just don’t want to sell it.”

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  • Elon Musk says a Trump presidency ‘would be devastating’ to Tesla’s competitors

    Elon Musk says a Trump presidency ‘would be devastating’ to Tesla’s competitors

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    Tesla CEO Elon Musk is firmly in former President Donald Trump’s corner politically, but what a potential Trump Administration could mean for the electric vehicle maker that pays Musk billions is unclear—even to Musk himself.

    During a call with financial analysts on Tuesday, Wells Fargo director Colin Langan asked Musk to explain the impact of a Trump win and the potential wipeout of a federal $7,500 tax credit for electric vehicles.

    “I guess there would be some impact,” said Musk. “It would be devastating for our competitors, and it would hurt Tesla slightly.”

    The CEO also noted that because Trump has promised heavy tariffs on vehicles produced in Mexico, Tesla would pull back on investing in a factory it had planned to open in Monterrey in 2026. “If that’s going to be the case, we kind of need to see how things play out politically,” he said. Yesterday, Musk denied reports that he would pump $45 million per month into Trump’s campaign.

    Speaking on CNBC before the earnings call, Wedbush Securities tech analyst Dan Ives said that a Trump presidency could be negative for the overall EV market because Trump could eliminate the Inflation Reduction Act and with it the tax credits for EVs and certain plug-in hybrids. That would mean an administration under Kamala Harris, the presumptive Democratic party nominee, could be a positive for the EV industry.

    Yet, Trump might be better for the regulatory agenda needed to promote full-self driving and autonomy, which is a key component of Tesla’s growth strategy, said Ives.

    “Musk has been background noise under the Biden Administration and in a Trump administration, is that something that will be more front and center?” said Ives. “That’s why I would say Tesla is part of that Trump trade.”

    Musk dismissed the notion that regulators might balk at a fleet of Tesla-made, self-driving robotaxis without steering wheels and pedals. An analyst asked Musk to explain why regulatory risk wasn’t an issue for Tesla, when General Motors had paused production of its Origin vehicle that doesn’t have a steering wheel, in favor of its Chevrolet Bolt, in part because of regulation. The Cruise Origin autonomous vehicle would need approval from the National Highway Traffic Safety Administration because it doesn’t have traditional manual controls like a steering wheel and pedals, which are required by current safety regulations, and were written for cars with human drivers and not fully autonomous vehicles.

    “The main reason with switching from the Origin to the Bolt is we extinguish the regulatory risk,” GM CEO Mary Barra said, according to a Reuters report.

    “The real reason they canceled it is because GM can’t make it work,” said Musk, adding that the automaker’s technology “is not up to par.” He said blaming regulators was “misleading.”

    Jim Cain, an executive director at GM, told Fortune Musk is flat wrong.

    “All of those statements are categorically false,” said Cain, who listened to Musk’s comments during the earnings call. “The Origin vehicle faced a lot of hurdles getting certified because it doesn’t have a steering wheel, it doesn’t have a brake pedal, and it has a unique seating layout that requires a federal motor vehicle safety waiver—full stop.”

    Cain said Cruise technology improves every day because of the way it leverages its data set with AI. “And so far, they have driven more than 5 million fully autonomous miles and Tesla has driven exactly zero.”

    Musk has an unshakeable faith in Tesla’s power to “solve autonomy,” which he reiterated Tuesday, even as Tesla reported financial results showing net profits dropped 45%, marking its second quarter of sluggish growth and fourth straight quarter of falling quarterly earnings. Car industry data also showed that Tesla continues to lose popularity in California, where sales fell 24% in the second quarter. Meanwhile, Trump has pledged to end what he referred to as the “green new scam,” promising to abolish “the electric-vehicle mandate on day one.”

    According to Ives, if autonomy is the strategic future of Tesla, it might be more beneficial for Tesla to have less regulation, which is likelier under a Trump presidency versus a Harris presidency.

    “The cherry on top of what could be the sundae” for investors is how the company will impact the robotics market and its efforts on full-self driving and autonomy, said Ives. Ultimately, that’s how the company could potentially reach a $1 trillion or even $2 trillion valuation, he added.

    Recommended Newsletter: The Fortune Next to Lead newsletter is a must-read for the next generation of C-suite leaders. Every Monday, the newsletter provides the strategies, resources, and expert insight needed to claim the most coveted positions in business. Subscribe now.

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  • Yes, Joe Biden Is Old: 8 Amazing Achievements by People Older Than 77

    Yes, Joe Biden Is Old: 8 Amazing Achievements by People Older Than 77

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    Updated: 7/15/2024

    Originally Published: 9/21/2020

    Joseph Robinette Biden Jr. was born on November 20th, 1942.

    And Joe Biden is old. He’s so old that “Robinette” probably seemed like a reasonable thing to put in the middle of your kid’s name back when he was born.

    The fact that our two options in the 2024 election to lead us are men who are both more than 35 years older—and about 40% whiter—than the average American, is a damning indictment of our political system. But with both men widely accused by their critics of losing a step and declining into senility, should age be a defining issue in this election? Is Joe Biden, 77, so much older than Donald Trump, 74, that he should be disqualified?

    The question of age — old age, to be precise – is garnering a lot of attention lately. And for good reason: the fate of the Western world very possibly hinges on it.

    This autumn, Americans will most likely have to choose between two old white men for President of the United States. One is in his early 80s. The other is in his late 70s. Both are showing signs of physical and mental aging. Both claim to be in great shape and ready for the Herculean demands required of the most powerful leader in the world. Both claim the other isn’t.

    Whether you think this is a clash of the Titans or merely a pillow fight in a senior care facility, there’s no denying that our nation’s oldsters have accomplished some amazing things. Here are only a few of the performers, politicians, athletes, tycoons, and scientists who saw no reason to rest on their laurels. They can inspire us all.

    Betty White – Won a Grammy at 90

    Betty White had been a working actor since the 1940s, but she didn’t win her first Emmy until 1975 for her role as Sue Ann Nivens on The Mary Tyler Moore Show. Ten years later she was starring in the sitcom classic The Golden Girls. Eighteen years after that she was appearing in Hot in Cleveland. When she was a kid of 90, she was honored at the 54th annual Grammy Awards for Best Spoken Word Album for the narration of her audiobook If You Ask Me (And of Course You Won’t).

    Tao Porchon-Lynch – Taught yoga at 101

    Of French and Indian descent author and yoga teacher Porchon-Lynch was also a model, an actor, a cabaret performer mentored by Sir Noel Coward, a ballroom dancer, a social activist, Hollywood actress, wine expert, and magazine publisher. At 93 she was named the world’s oldest yoga teacher by the Guinness Book of World Records. She was also one of the best.

    It’s a life of such variety and depth it could only be true. You wouldn’t believe it in a novel!

    John B. Goodenough – Won a Nobel Prize at 97

    Chemist and Materials scientist John B. Goodenough is noted for his contributions to the development of Random Access Memory in computing and Lithium-Ion battery technology. In 2019 the Nobel Prize committee presented him with the Nobel Prize in chemistry.

    Goodenough was still working at the age of 98, developing new battery technology at the University of Texas. When his Nobel prize was announced, his advice to young scientists was “don’t retire too early.” Good advice whether you’re in the laboratory or not.

    Christopher Plummer – Won an Academy Award at 82

    Beginners exemplified how much living can be done later in life. Christopher Plummer plays Hal Fields, a gay man who lived his life in the closet until coming out after the death of his wife.

    Fields discovers new love and how to live his authentic self in his 80s.

    At 82, Plummer was awarded the Academy Award for Best Supporting Actor – and became the oldest person to ever win the award. In 2018, at 88, he became the oldest person to be nominated for the same award for his role in All the Money in the World.

    Ed Whitlock – Ran a Sub-4-Hour Marathon at 85

    Could you run a marathon? If your answer’s yes, could you do it in less than 4 hours? Ed Whitlock did exactly that. He ran the 2016 Toronto Waterfront Marathon in 3 hours, 56 minutes, 34 seconds, at the age of 85.

    He ran a distance famous for killing an ancient Greek messenger after surviving the Great Depression, World War II, and 24 James Bond movies. He ran 26 nine-minute miles in a row…again, after also traveling around the sun 85 times. Ed Whitlock passed the next year, probably moments after deciding he was finally ready to retire from running.

    In a piece about Whitlock’s career as an older athlete, the Services for Runners website referred to “the prime of the ancient marathoner.” A witty description of an indomitable figure.

    Jimmy Carter – Building Houses at 95

    Several years ago former president Jimmy Carter fell in his home, sustaining a black eye and a cut that required 14 stitches. Days later, he returned to the construction site where he was building homes for those in need. He was 95 years old at the time.

    It’s been said that Carter accomplished more out of office than he did as the main resident of 1600 Pennsylvania Avenue. That may or may not be accurate, but Carter’s dedication to Habitat for Humanity, his modesty and concern for his fellow citizens stands in stark contrast to the criminal buffoons who view the Presidency as nothing but a giant ATM card. According to his grandson, Carter is nearing the end of his life. Plains, Georgia’s most famous son has proven how much difference one person can make.

    Bernie Sanders – Transformed American Politics at 78

    For fans of Bernie Sanders, the coalescing of the entire Democratic party around moderate candidate Joe Biden in March of 2020, just when it seemed like Sanders was about to secure frontrunner position, was heartbreaking.

    Consolation can be found in Sanders’ effect on the nation’s progressive politics. He’s been a consistent voice for Medicare
    for All, a livable minimum wage, cannabis decriminalization, and bold climate legislation. It’s clear he’ll keep fighting the good fight until his last breath. He is anything but shy – and Democrats could use a dose of his feisty approach to politics.

    Aida Germanque – Ran in Olympic Torch Relay at 106

    In 2016, Aida Germanque participated in the Olympic torch relay in Brazil in the lead-up to the 2016 Olympic games in Rio. At 106 years old, Germanque was the oldest person to ever take part in the ceremony. She reportedly broke the record for oldest skydiver at 103.

    But while it’s true that Germanque didn’t exactly sprint through her portion of the relay, the significance of her achievement is in the symbolism of the relay. It’s about passing the torch to the next runner. And as Joe Biden has already hinted, that’s what he intends to do with the presidency—serving one term, before passing it to the next generation of Democratic politician, whether that’s Kamala Harris or (fingers crossed) Alexandria Ocasio-Cortez, who will be eligible to run for president in 2024.

    It should be clear by now that age needn’t be an impediment to a healthy and productive life. How this plays out in November is something we’ll all be watching closely. Age will certainly be a factor in the presidential race. It shouldn’t automatically disqualify a candidate for office. Leave that to other, far less savory things like inciting violence, threatening to open concentration camps, and “joking” about running for a third term.

    The moral of the story is a simple one.

    Lay off the Big Macs. Help others. You’ll live longer and enjoy it more!

    So, clearly, being 77 or 81 does not mean you’re done doing amazing things. That said, there is such a thing as “biological age.” If a person were to work out five times a week —as opposed to living off Big Macs and (allegedly) amphetamines and only working up a sweat by ranting from the podium and on Twitter — that person could be much “younger” than someone born a few years after them.

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  • Jim Cramer calls this stock the Buffett bank; warns nothing really new on Netflix

    Jim Cramer calls this stock the Buffett bank; warns nothing really new on Netflix

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  • Traders who scooped up Warren Buffett’s Berkshire Hathaway shares at a massive $620,000 discount during glitch will have their deals canceled by the NYSE

    Traders who scooped up Warren Buffett’s Berkshire Hathaway shares at a massive $620,000 discount during glitch will have their deals canceled by the NYSE

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    Investors who purchased shares in Warren Buffett’s Berkshire Hathaway yesterday at a huge discount will see their trades canceled following a technical issue on the stock exchange.

    On June 3, a data glitch led the global conglomerate’s stock price to fall to $185 a share, having previously closed at over $620,000. The drop meant a more than 99% discount on the Warren Buffett-led company.

    This means a trader who snapped up just $925 worth of the stock at the rock-bottom price would now see their investment worth over $3 million today.

    While it hasn’t been confirmed how many people purchased the Class A stock during the technical error—which lasted for around an hour and a half—the New York Stock Exchange (NYSE) has swiftly undone their trades.

    In an update posted at 9 p.m. last night, NYSE said it would “bust” all the “erroneous” trades of Berkshire Hathaway stock at or below $603,718.30 a share.

    The issue, the exchange added, is related to a problem at the Consolidated Tape Association (CTA), which provides real-time information about quotes and trades on the exchange. The CTA oversees part of the Securities Information Processor (SIP) which consolidates all protected bid/ask quotes and trades into a single data stream.

    The CTA said it experienced problems with price banding which “may have been related to a new software release” on SIP. As a result the CTA has reverted to the previous version of the software. The CTA did not immediately respond to Fortune’s request for comment.

    During the blip, the NYSE placed halts on certain trades, and will seek to determine which are erroneous and thus eligible to be canceled. The technical issue has now been resolved, it added, with all tickers trading as normal.

    Traders who didn’t hop on a discounted Berkshire Hathaway stock but did buy heavily discounted shares in other brands will also be subject to having their trades struck off—with the ruling not eligible for appeal.

    Other tickers that were impacted include American restaurant chain Chipotle (CMG), mining company Barrack Gold Corporation (GOLD) and meme stock darling GameStop (GME).

    For Berkshire Hathaway, the good news is that its Class B Stock (BRK.B) was not impacted by the ticker problem, and its Class A stock closed at more than $631,000 a share.

    Berkshire Hathaway did not immediately respond to Fortune’s request for comment.

    Costly mistakes

    The Berkshire Hathaway mega-bargain is one of many hiccups experienced by various international stock exchanges—and is unlikely to be the last.

    Just last week, live data from the S&P 500 and the Dow Jones Industrial Average disappeared from traders screens for around an hour, the Financial Times reported. The system then returned to normal but the cause of the outage is being investigated.

    While the NYSE issue has been fixed with limited fallout, the same couldn’t be said for a LSE incident that has cost Wall Street giant Citigroup tens of millions.

    In May 2022, a London trader bypassed hundreds of warning notifications to create a basket worth $444 billion.

    While $255 billion was blocked from trading by Citi’s internal management systems, a basket worth $189 billion was still released to the global markets.

    A total of $1.4 billion of equities were sold across various European exchanges before the trader canceled the order. Citi was fined a near-$70 million by the UK’s Financial Conduct Authority for the oversight and related matters.

    This story was originally featured on Fortune.com

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  • Warren Buffett said he could make a 50% return on $1 million and predicted higher taxes. Here are 14 Q&A nuggets.

    Warren Buffett said he could make a 50% return on $1 million and predicted higher taxes. Here are 14 Q&A nuggets.

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    Warren Buffett.Rick Wilking/Reuters

    • Warren Buffett’s Q&A at Berkshire’s annual meeting was full of interesting nuggets and tidbits.

    • He teased a possible Canadian bet, and said he could make a 50% annual return on $1 million.

    • Buffett predicted higher taxes and revealed a $500 million donation of Berkshire stock.

    Warren Buffett let slip a slew of intriguing facts and anecdotes during Berkshire Hathaway’s annual shareholder meeting on Saturday.

    The headlines from the event included Buffett confirming he’d sold 13% of his gargantuan Apple stake, admitting responsibility for a losing bet on Paramount, and raising the alarm on AI-powered fraud.

    But the Berkshire CEO also warned of higher taxes, teased a potential Canadian investment, and revealed a $500 million gift of Berkshire stock.

    Moreover, Buffett declared that he could earn a 50% annual return on $1 million, predicted Berkshire’s cash pile would balloon to more than $200 billion this quarter, and recalled the time a Russian chess grandmaster visited Omaha.

    Here are 14 interesting nuggets from the Berkshire meeting:

    1. Raking it in

    Buffett pointed out that Berkshire generated some $37 billion in operating profits last year, meaning that on an average day, he received a fresh $100 million to deploy. The investor was underscoring the difficulty of shrewdly investing such a large and relentless inflow of cash.

    2. Cash hoard

    Berkshire’s mountain of cash and Treasury hit a record $189 billion last quarter, and it’s likely to swell to more than $200 billion this quarter, Buffett said.

    “I don’t mind at all, under current conditions, building the cash position. When I look at the alternative of what’s available, in the equity markets, and I look at the composition of what’s going on in the world, we find it quite attractive.”

    3. Taxing times

    The government will probably raise taxes in the coming years in a bid to balance its budget, Buffett said.

    “I would say with the present fiscal policies that something has to give. I think that higher taxes are quite likely. The government may decide that someday they don’t want the fiscal deficit to be this large, and they may not want to decrease spending a lot, and they may decide they’ll take a larger percentage of what we earn.”

    4. Charlie and Costco

    Buffett bemoaned that he should have listened to his late business partner, Charlie Munger, and been “more aggressive” with his investment in Costco.

    Berkshire increased its stake in the retailer from $32 million in 1999 to $1.3 billion in June 2020, then exited the following quarter. Costco stock surged more than 500% during that period.

    “Charlie twice pounded the table with me and just said, ‘Buy, buy, buy.’ BYD was one of them and Costco was the other,” Buffett said.

    Costco in WisconsinCostco in Wisconsin

    A Costco store in Wisconsin.Talia Lakritz/BI

    5. Canada intrigue

    Buffett revealed he’s exploring a potential investment in Canada.

    “We do not feel uncomfortable in any way, shape, or form putting our money into Canada. In fact, we’re actually looking at one thing now.”

    6. New regime

    Buffett appeared to change his mind over who would run Berkshire’s stock portfolio once he’s gone. Instead of his investment managers, Todd Combs and Ted Weschler, he suggested his successor as CEO, Greg Abel, would oversee it.

    “I think the responsibility ought to be entirely with Greg,” Buffett said. “He understands businesses extremely well and if you understand businesses, you understand common stocks.”

    7. Cracking down

    Buffett admitted that he and Munger were lenient with underperforming managers, but declared that would change once Abel takes over.

    “If you have 20 children and you’re very rich, you’ll have some that will be go-getters anyway, and you’ll have some that won’t. We are a very, very rich company and we haven’t had a history of being very tough on people that coasted. Greg will do something about it.”

    8. Bashing banks

    Buffett took aim at Wall Street while underscoring that Berkshire’s rock-solid financials allow it to lend and invest money during dark periods when nobody else will.

    “At those times, we want to be sure that the US government thinks we’re an asset to the situation and not a liability or a supplicant, as the banks were in 2008 and 2009. They were all tarred with the same brush. But we want to be sure that the brush that determines our future is not tarred.”

    9. Paying fees

    Buffett may be a bargain hunter with little respect for middlemen, but he happily paid the standard broker fee on his last home sale.

    “I did sell a house for $7 million. I did not negotiate the 6% down, and I feel I got my money’s worth and then some. And I’m cheap by nature, so it isn’t I’m careless about it. I got my money’s worth.”

    10. Mystery gift

    Ruth Gottesman, the widow of the late Berkshire director Sandy Gottesman, recently donated $1 billion of Berkshire stock to the Albert Einstein College of Medicine to cover students’ tuition in perpetuity.

    Buffett revealed that at the same time that Berkshire was repurchasing those shares from the college in exchange for cash, it was also buying back $500 million of stock from another charitable donor in a different state.

    He shared that fact to make the case that Berkshire shareholders are unrivaled in their generosity.

    close-up of Ruth Gottesman smilingclose-up of Ruth Gottesman smiling

    Ruth Gottesman.Brent N. Clarke/Getty Images

    11. Pocket change

    Buffett claimed that if he had only $1 million to invest instead of nearly $200 billion, he could earn a 50% annual return. “I would try and know everything about everything small, and I would find something.”

    12. Dollar champion

    Buffett shrugged off fears of “de-dollarization” or dwindling dollar dominance worldwide: “There really isn’t any alternative to the dollar as a reserve currency.”

    13. Debt and deficit

    The investor raised the alarm on the US government running a large budget deficit and racking up unprecedented amounts of debt.

    “I don’t sit and work myself into a stew about it in the least,” Buffett said about the government spending more than it brings in each year. “But I can’t help thinking about it.”

    “It won’t be the quantity, it will be whether in any way inflation would get let loose in a way that really threatened the whole world economic situation,” he said about the national debt.

    14. Chess royalty

    Buffett recalled that Russian chess icon Garry Kasparov once visited his home town and met the legendary founder of Berkshire-owned Nebraska Furniture Mart.

    “I know great bridge players, I know great chess players. Actually, Kasparov came to Omaha, met Mrs B.”

    Read the original article on Business Insider

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  • ‘Oracle of Omaha’ Warren Buffett predicts ‘higher taxes are likely’ since the national debt won’t pay for itself

    ‘Oracle of Omaha’ Warren Buffett predicts ‘higher taxes are likely’ since the national debt won’t pay for itself

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    The U.S. government may be coming to take a larger bite out of corporate profits, and Berkshire Hathaway chairman Warren Buffett wants to be prepared.

    When asked at Saturday’s annual shareholder meeting why he sold 115 million shares of Apple over the past quarter, the ‘Oracle of Omaha’ predicted companies like his could find themselves handing more of their earnings to Uncle Sam. And he for one is fine with the idea. 

    “With present fiscal policies, I think something has to give. And I think higher taxes are quite likely,” he said, lecturing other companies for constantly scrutinizing the tax code for the smallest loopholes that can reduce their tax burden.

    Under the Trump administration, the statutory rate for corporations was reduced to 21% in 2017 from a previous 35% and Buffett recalled it has been much higher in the past. 

    “They may decide that someday they don’t want the fiscal deficit to be this large, because that has some important consequences and they may not want to decrease spending a lot and they may decide they’ll take a larger percentage of what we earn, and we’ll pay it,” he said during his first shareholder meeting since the passing of longtime business partner Charlie Munger. 

    Buffett has repeatedly advocated that those who can pay more taxes should do so, famously saying his secretary paid a higher tax rate than he did. The Biden administration is now looking to address that in the election year with a proposal for higher capital gains taxes, including on unrealized gains. 

    Due to the growing inability of DC’s political elites to agree on how best to tackle U.S. government debt, Standard & Poor’s in 2011 stripped the country of its AAA sovereign debt rating—something Buffett criticized at the time. The ratings agency has since been joined by Fitch, which downgraded the U.S. last year—and Moody’s is expected to follow. 

    The broader topic of the national debt lends itself to misconceptions when people think of it in terms of personal debt. While the level must be managed prudently—U.S. national debt now stands at over $34 trillion, or 122% of the economy—it is not something that has to be paid off like a homeowner’s mortgage. 

    Not even companies pay off their debt—many simply negotiate terms under which they can roll it over. In fact, investors demand that companies gear their balance sheets based on their risk profile, because if they don’t they won’t produce high enough returns on their equity. Indeed, the business model of buyout firms like Blackstone and Carlyle relies on optimizing the capital structure of a purchased company.

    Buffett sees no alternative to U.S. Treasury bonds

    Each country’s experience with debt is different—and it doesn’t always depend on the size of the debt.

    Japan, for example, has shouldered far more debt than Greece, but until late last year it was predominantly held by domestic investors, a stable source of funding much like a bank’s guaranteed depositor base. Greece, however, was reliant on international investors who can shift their money from one jurisdiction to another at a moment’s notice. 

    If spent on productive assets, debt is a useful tool for governments to improve their economy’s growth or resilience without resorting to taxation. Crisis only hits when investors lose faith in a government or company’s ability to service their debt and the situation spirals out of control in a destructive feedback loop that sees investors demanding ever higher premiums to offset ever rising risk. 

    Economists argue over where the tipping point hits when the level of debt as a proportion of the overall economy is no longer sustainable. But the U.S. enjoys three major advantages that explain why the debt hasn’t been a problem yet. 

    For one, it has a highly flexible and resilient economy capable of adjusting to external shocks better than most industrial nations—this offers investors a more attractive return than parking their money elsewhere. 

    It also has the deepest and most liquid sovereign debt market in the world, crucially allowing it to serve as a safe haven for capital in times of crisis—which is precisely when this advantage is needed the most. And finally, it has the world’s reserve currency so there is always a need for dollars and the preferred means of holding them is through interest-bearing Treasuries rather than cash. 

    “My best speculation is that U.S. debt will be acceptable for a very long time, because there is not much alternative,” said Buffett.

    If anything, the U.S.’s problem is that too many administrations—both Republican and Democrat—have become complacent about the issue since Bill Clinton balanced the budget, knowing full well there has been no attempt at addressing burgeoning risks from the U.S. unfunded entitlement programs for Medicare and Social Security.  

    Subscribe to the CFO Daily newsletter to keep up with the trends, issues, and executives shaping corporate finance. Sign up for free.

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    Christiaan Hetzner

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  • Berkshire Hathaway event gives good view of Warren Buffett’s successor but also raises new questions

    Berkshire Hathaway event gives good view of Warren Buffett’s successor but also raises new questions

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    This year’s Berkshire Hathaway meeting gave shareholders their best chance yet to hear from the man who will one day take over as CEO when Warren Buffett is gone, but Buffett said for the first time Saturday that Greg Abel should also take responsibility for the company’s investments after he takes over, raising new questions about the succession plan.

    Abel put his encyclopedic knowledge of the utility business that he led directly for years on display and delved into railroad operations and potential acquisitions that Berkshire pursued while sharing the stage with Buffett all day. For his part, the 93-year-old billionaire showed investors he is still sharp.

    Abel pointed out that it required a major culture shift to get workers at PacifiCorp and the other utilities, who have long focused all their energy on keeping the lights on, to think about shutting the power down at times when the risk that their power lines could spark wildfires is too great. He also said BNSF railroad is working on getting “our cost structure right” after delivering disappointing results.

    Succession was clearly top of mind for many of the thousands of people who filled an Omaha arena to listen to the two men after last fall’s death of Vice Chairman Charlie Munger. Buffett, Abel and Ajit Jain, Berkshire’s other top executive who oversees the company’s insurers, reassured investors that Berkshire’s board spends plenty of time focused on “what would happen to the operation if I get hit by a truck,” as Jain put it. Finding the right replacement for any of the three of them will be important.

    Previously, Buffett had said that when Abel becomes CEO, investment managers Ted Weschler and Todd Combs, who’s also taken on the responsibility of being Geico’s CEO, would handle Berkshire’s massive portfolio. But Buffett said Saturday that his thinking has evolved, and that “I would probably, knowing Greg, I would leave the capital allocation to Greg.”

    And Buffett said because Abel understands businesses so well, he also understands stocks.

    But Edward Jones analyst James Shanahan said a good business doesn’t always make a good stock unless you get the timing and position size right, and there is an art to that.

    “I think stock picking is hard. I don’t think it’s something you can just start doing and be good at it,” Shanahan said.

    Abel does have a history of making multibillion-dollar deals when he was the head of Berkshire’s utility unit for a decade, including the acquisitions of NV Energy and AltaLink, but he’s never been a stock picker. Weschler and Combs might be able to help Abel get the timing right and find opportunities in the stock market, but Buffett didn’t say that Saturday.

    Abel just reassured shareholders that “the capital allocation principles that we use today will be maintained.”

    “Does that give you more or less confidence post-Buffett? I would say it’s got to give you less — not because it’s a worse circumstance — but because it hasn’t been very transparent and communicated that clearly. You’ve got to start asking, well, what else is going to change?” said Cole Smead with Smead Capital Management.

    Abel definitely has the confidence of the CEOs at all of Berkshire’s many varied noninsurance businesses who report to him and ask his advice on any challenges they are facing.

    “Greg sees so much more than I do on a daily basis. So his perspective is valued, and his wisdom is something that is such a luxury for all of us to be able to tap into,” said Dan Sheridan, who just became CEO of Brooks Running this year after his predecessor retired. He said Abel is always humble and curious about the business, even while asking challenging questions.

    See’s Candies CEO Pat Egan added that Abel reflects all of Berkshire’s core values, with the company’s emphasis on integrity, taking care of customers and strengthening brands, while still giving Berkshire’s subsidiaries the freedom to operate independently.

    “He really expects us to know our business, understand the parameters, and to run our business on a day to day basis,” said Tim Baucom, CEO of flooring giant Shaw Industries. “So I feel like I have all the freedom of the world, but with freedom comes responsibility.”

    The shareholders who attended the meeting and spent hours shopping and talking with executives at the booths Berkshire subsidiaries set up when they weren’t listening to Buffett and Abel remain confident. Some of them even got the chance to take selfies with Abel, though Buffett no longer tours the exhibit hall in public.

    “I think they’ll be fine,” said Michael Grizzard, who made the trip to Omaha from Richmond, Virginia, for the second time. “They’re in good hands, and I think they have a good culture.”

    Smead said even Buffett, who is easily one of the greatest investors the world has ever seen, has been having a hard time lately finding good investments big enough to make a difference at Berkshire except for the $135 billion Apple stake that remains its largest investment even after some trimming this year.

    So no matter how good an investor Abel is, he will have a hard time finding deals big enough to provide a meaningful boost to Berkshire’s earnings that approached $13 billion in a down first quarter. That challenge is a big part of why Buffett has warned investors not to expect any of the “eye-popping performance” of Berkshire’s past.

    But for now, Buffett showed that Abel may not need to take over anytime soon because he looked good and he has long said he has no plans to retire, even if he acknowledged Saturday that he doesn’t have the same energy he used to. CFRA Research analyst Cathy Seifert came away impressed with his stamina.

    “There wasn’t anything in that performance that I found worrisome or troubling,” Seifert said.

    ___

    For more AP coverage of Warren Buffett look here: https://apnews.com/hub/warren-buffett. For Berkshire Hathaway news, see here: https://apnews.com/hub/berkshire-hathaway-inc. Follow Josh Funk online at https://apnews.com/author/josh-funk,https://www.twitter.com/funkwrite and https://www.linkedin.com/in/funkwrite.

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  • Berkshire Hathaway has first annual meeting since death of longtime vice chairman Charlie Munger

    Berkshire Hathaway has first annual meeting since death of longtime vice chairman Charlie Munger

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    Warren Buffett’s Berkshire Hathaway gathered for its first annual meeting in an Omaha arena on Saturday, bringing together shareholders for the first time since the death of longtime vice chairman and right-hand man Charlie Munger. 

    Tens of thousands of shareholders filled the arena eager to vacuum up tidbits of wisdom from billionaire Buffett, who famously dubbed the meeting “Woodstock for Capitalists” and to pay tribute to Munger, who died at 99 in November. 

    The meeting opened with a video tribute to Munger recounting his life and highlighting some of his best known quotes from the meetings over the years that drew applause, including classic lines like “If people weren’t so often wrong, we wouldn’t be so rich.” The video also featured old interviews with Buffett and Munger talking about their epic friendship.

    The video also featured several of the classic skits the investors made for meetings over the years with holiday stars like a “Desperate Housewives” spoof where one of the women introduced Munger as her boyfriend and another video where Jamie Lee Curtis swooned over Munger.

    As the video ended, everyone in the arena gave Munger a prolonged standing ovation to thank him for being what Buffett called “the architect of Berkshire Hathaway.”

    Berkshire Hathaway Shareholders
    Harold and Caroline Ernst of St. Louis chat with fellow shareholders as they wait for the Berkshire Hathaway annual meeting to begin on Saturday, May 4, 2024, in Omaha, Neb.

    Rebecca S. Gratz / AP


    For decades, Munger shared the stage with Buffett every year for the marathon question and answer session that is the event’s centerpiece. Munger routinely let Buffett take the lead with expansive responses that went on for several minutes. Then Munger himself would cut directly to the point. He is remembered for calling cryptocurrencies stupid, telling people to “marry the best person that will have you” and comparing many unproven internet businesses in 2000 to “turds.”

    He and Buffett functioned as a classic comedy duo, with Buffett offering lengthy setups to Munger’s witty one-liners. Together, they transformed Berkshire from a floundering textile mill into a massive conglomerate made up of a variety of interests, from insurance companies such as Geico to BNSF railroad to several major utilities and an assortment of other companies.

    Munger often summed up the key Berkshire’s success as “trying to be consistently not stupid, instead of trying to be very intelligent.” He and Buffett also were known for sticking to businesses they understood well.

    “Warren always did at least 80% of the talking. But Charlie was a great foil,” said Stansberry Research analyst Whitney Tilson, who was looking forward to his 27th consecutive meeting with a bit of a heavy heart because of Munger’s absence.

    That absence, however, may well create space for shareholders to get to know better the two executives who directly oversee Berkshire’s companies: Ajit Jain, who manages the insurance units, and Greg Abel, who handles everything else. Abel will one day replace the 93-year-old Buffett as CEO. Abel and Jain are sharing the main stage with Buffett for the first time this year in the spot Munger used to occupy.

    The first time Buffett kicked a question to Abel, he mistakenly said “Charlie?” out of habit.

    Morningstar analyst Greggory Warren said he hopes Abel will speak up more this year and let shareholders see some of the brilliance Berkshire executives talk about. Ever since Munger let it slip at the annual meeting three years ago that Abel would be the successor, Buffett has repeatedly reassured investors that he’s confident in the pick.


    Sunday Profile: Warren Buffett

    09:54

    Berkshire Hathaway remains successful amid drop in earnings 

    Buffett’s company reported a steep drop in earnings because the paper value of its investments fell and it sold off part of its massive Apple stake, but overall, Berkshire Hathaway’s many businesses performed well. 

    Berkshire reported a $12.7 billion profit, or $8,825 per Class A share, in the quarter. That’s roughly one-third of the $35.5 billion, or $24,377 per A share, that Berkshire reported a year ago.

    But those figures were heavily swayed by a large drop in the paper value of Berkshire’s investments. That’s why Buffett encourages investors to pay more attention to the conglomerate’s operating earnings that exclude the investment figures. By that measure, Berkshire’s operating earnings jumped 39% to $11.222 billion from last year’s $8.065 billion as its insurance companies led a strong performance.

    The three analysts surveyed by FactSet Research had predicted operating earnings of $6,701.87 per Class A share.

    Buffett did sell off nearly $6 billion in stocks during the quarter, including trimming about 13% of Berkshire’s massive Apple stake. The investment in the iPhone maker is still the biggest one in the $364 billion portfolio at $135.4 billion, and Buffett said he expects Apple to remain the biggest investment for years — even up to when his successor takes over.

    But the estimated value of Berkshire’s Apple stake suggests that Buffett sold off more than 100 million shares. Buffett has said he invested in Apple’s stock because of how devoted consumers are to the iPhone and other Apple products.

    Apple CEO Tim Cook, who is at the Berkshire meeting, told CNBC that he still considers it a privilege to have Berkshire as a major shareholder, and he knew about the sales before Berkshire disclosed them Saturday.

    Berkshire reported a $2.6 billion underwriting profit at its insurers, up from $911 million a year ago.

    BNSF railroad’s profits did disappoint and drop 8% to $1.143 billion, but most of its many other companies delivered solid results, including a 72% jump in operating profits at the utility unit that added $717 million to Berkshire’s total.

    Berkshire’s revenue grew 5% to $89.87 billion in the quarter. The two analysts who reported estimates to FactSet predicted $87.044 billion revenue.

    With no major acquisitions in sight, Berkshire’s massive cash pile continued to grow to a record $188.993 billion in the quarter. Berkshire even spent $2.6 billion repurchasing shares during the first three months of the year, but its companies include Geico insurance, BNSF railroad, several major utilities and an assortment of dozens of others keep generating mountains of cash.

    “We’d love to spend it but we won’t spend it unless we’re doing something with very little risk that will make us a lot of money,” Buffett said. 

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  • Warren Buffett’s Berkshire Hathaway cut Apple investment by about 13% in the first quarter

    Warren Buffett’s Berkshire Hathaway cut Apple investment by about 13% in the first quarter

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    Warren Buffett walks the floor ahead of the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska on May 3, 2024. 

    David A. Grogen | CNBC

    OMAHA, Nebraska — Warren Buffett’s Berkshire Hathaway cut its gigantic Apple stake in the first quarter as the “Oracle of Omaha” continued to downsize his one-time favorite bet.

    In its first-quarter earnings report, Berkshire Hathaway reported that its Apple bet was worth $135.4 billion, implying around 790 million shares. That would mark a decline of around 13% in the stake. Apple was still Berkshire’s biggest holding by far at the end of the quarter.

    This is the second quarter in a row that the Omaha-based conglomerate has trimmed the stake in the iPhone maker. It sold about 10 million Apple shares (just 1% of its massive stake) in the fourth quarter. This filing, when accounting for the change in Apple’s stock price, would imply Berkshire sold about 116 million shares.

    Buffett became a big fan of Apple after one of his investing managers Ted Weschler or Todd Combs convinced him to buy the stock years ago. Buffett even called the tech giant his second-most important business after Berkshire’s cluster of insurers.

    Stock Chart IconStock chart icon

    Apple

    Many has speculated that the 93-year-old investing icon reduced his favorite stake due to valuation concerns. Apple’s stock gained a whopping 48% in 2023 as megacap tech shares led the market rally. At its peak, Apple ballooned in Berkshire’s equity portfolio, taking up 50% of it. The shares are trading at more than 27 times forward earnings.

    Shares of the iPhone maker got a big boost in the past week after the firm announced that its board had authorized $110 billion in share repurchases, the largest in company history. However, Apple posted a decline in overall sales and in iPhone sales. The shares are down more than 4% so far this year amid concerns about how it will revive growth.

    It’s not without precedent that the Berkshire CEO would adjust the Apple bet. He sold a bit of the stock in the fourth quarter of 2020, but Buffett admitted then that it was “probably a mistake.” Also it’s not usual for Buffett to trim a position that has grown so large.

    Even with the sale, Berkshire is still Apple’s largest shareholder outside of exchange-traded fund providers.

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  • Warren Buffett to Host Berkshire Hathaway Shareholder Meeting with Succession in Focus

    Warren Buffett to Host Berkshire Hathaway Shareholder Meeting with Succession in Focus

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    Warren Buffett
    Shareholders shop for items at the Pampered Chef display at the Berkshire Hathaway annual shareholder’s meeting on April 30, 2022 in Omaha, Neb. Scott Olson/Getty Images

    Tomorrow (May 4), Warren Buffett’s Berkshire Hathaway (BRK.A) will kick off its annual shareholder meeting in the investing conglomerate’s home base in Omaha, Neb. This year, Buffett will host the meeting without his right-hand man, Charlie Munger, who passed away late last year at the age of 99. Thousands of Berkshire shareholders will look for updates on  Buffett’s succession plan as well as his next big bet, as the company is also set to report first-quarter earnings tomorrow morning.

    It will not be the first time Buffett leads the shareholder meeting by himself, though. He held Berkshire’s 2020 meeting—virtually due to Covid-19—without Munger and said, “It particularly doesn’t feel like an annual meeting because my partner of 60 years, Charlie Munger, is not sitting up here.”

    Munger’s passing in November put Berkshire’s energy business chief Greg Abel and insurance chief Ajit Jain in the spotlight. In 2021, Munger revealed at that year’s shareholder meeting that Abel would succeed Buffett as CEO if anything happened to the CEO. “The directors are in agreement that if something were to happen to me tonight, it would be Greg who’d take over tomorrow morning,” Buffett told CNBC subsequently. He added that, if for some reason Abel couldn’t do the job, Jain would step in as CEO.

    Abel, 59, and Jain, 70, were promoted to vice chairmen of Berkshire Hathaway’s board in 2018 and have taken on a larger role in recent years. “Ajit and Greg have rare talents, and Berkshire blood flows through their veins,” Buffett wrote in his 2018 letter to shareholders. 

    In April this year, Abel joined Buffett on his business trip to Japan, where he made large investments in the country’s top trading houses. Abel “does all the work, and I take the bows—it’s exactly what I wanted,” Buffett told CNBC at the time.

    Another item in focus at tomorrow’s meeting will be Buffett’s next big bet, especially given Berkshire’s giant cash pile. At the end of 2023, Berkshire had a record $168 billion in cash. Shareholders are eager to know how Buffett plans to invest that money.

    During the December quarter, Berkshire reduced its stake in Apple (its largest holding), Paramount Global and HP while increasing shares in Chevron, Occidental Petroleum and Sirius XM Holdings. Also late last year, Berkshire acquired a mystery stock that the company requested the SEC for permission to keep confidential. Shareholders may expect the company to share more details about that as well.

    Warren Buffett to Host Berkshire Hathaway Shareholder Meeting with Succession in Focus

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  • Berkshire Hathaway’s big mystery stock wager could be revealed soon

    Berkshire Hathaway’s big mystery stock wager could be revealed soon

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    Warren Buffett tours the grounds at the Berkshire Hathaway Annual Shareholders Meeting in Omaha Nebraska.

    David A. Grogan | CNBC

    Berkshire Hathaway, led by legendary investor Warren Buffett, has been making a confidential wager on the financial industry since the third quarter of last year.

    The identity of the stock — or stocks — that Berkshire has been snapping up could be revealed Saturday at the company’s annual shareholder meeting in Omaha, Nebraska.

    That’s because unless Berkshire has been granted confidential treatment on the investment for a third quarter in a row, the stake will be disclosed in filings later this month. So the 93-year-old Berkshire CEO may decide to explain his rationale to the thousands of investors flocking to the gathering.

    The bet, shrouded in mystery, has captivated Berkshire investors since it first appeared in disclosures late last year. At a time when Buffett has been a net seller of stocks and lamented a dearth of opportunities capable of “truly moving the needle at Berkshire,” he has apparently found something he likes — and in the financial realm no less.

    That’s an area he has dialed back on in recent years over concerns about rising loan defaults. High interest rates have taken a toll on some financial players like regional U.S. banks, while making the yield on Berkshire’s cash pile in instruments like T-bills suddenly attractive.

    “When you are the GOAT of investing, people are interested in what you think is good,” said Glenview Trust Co. Chief Investment Officer Bill Stone, using an acronym for greatest of all time. “What makes it even more exciting is that banks are in his circle of competence.”

    Under Buffett, Berkshire has trounced the S&P 500 over nearly six decades with a 19.8% compounded annual gain, compared with the 10.2% yearly rise of the index.

    Coverage note: The annual meeting will be exclusively broadcast on CNBC and livestreamed on CNBC.com. Our special coverage will begin Saturday at 9:30 a.m. ET.

    Veiled bets

    Berkshire requested anonymity for the trades because if the stock was known before the conglomerate finished building its position, others would plow into the stock as well, driving up the price, according to David Kass, a finance professor at the University of Maryland.

    Buffett is said to control roughly 90% of Berkshire’s massive stock portfolio, leaving his deputies Todd Combs and Ted Weschler the rest, Kass said.

    While investment disclosures give no clue as to what the stock could be, Stone, Kass and other Buffett watchers believe it is a multibillion-dollar wager on a financial name.

    That’s because the cost basis of banks, insurers and finance stocks owned by the company jumped by $3.59 billion in the second half of last year, the only category to increase, according to separate Berkshire filings.

    At the same time, Berkshire exited financial names by dumping insurers Markel and Globe Life, leading investors to estimate that the wager could be as large as $4 billion or $5 billion through the end of 2023. It’s unknown whether that bet was on one company or spread over multiple firms in an industry.

    Schwab or Morgan Stanley?

    If it were a classic Buffett bet — a big stake in a single company —  that stock would have to be a large one, with perhaps a $100 billion market capitalization. Holdings of at least 5% in publicly traded American companies trigger disclosure requirements.

    Investors have been speculating for months about what the stock could be. Finance covers all manner of companies, from retail lenders to Wall Street brokers, payments companies and various sectors of insurance.

    Charles Schwab or Morgan Stanley could fit the bill, according to James Shanahan, an Edward Jones analyst who covers banks and Berkshire Hathaway.

    “Schwab was beaten down during the regional banking crisis last year, they had an issue where retail investors were trading out of cash into higher-yielding investments,” Shanahan said. “Nobody wanted to own that name last year, so Buffett could’ve bought as much as he wanted.”

    Other names that have been circulated — JPMorgan Chase or BlackRock, for example, are possible, but may make less sense given valuations or business mix. Truist and other higher-quality regional banks might also fit Buffett’s parameters, as well as insurer AIG, Shanahan said, though their market capitalizations are smaller.

    Buffett & banks

    Berkshire has owned financial names for decades, and Buffett has stepped in to inject capital — and confidence — into the industry on multiple occasions.

    Buffett served as CEO of a scandal-stricken Salomon Brothers in the early 1990s to help turn the company around. He pumped $5 billion into Goldman Sachs in 2008 and another $5 billion into Bank of America in 2011, ultimately becoming the latter’s largest shareholder.

    But after loading up on lenders in 2018, from universal banks like JPMorgan to regional lenders like PNC Financial and U.S. Bank, he deeply pared his exposure to the sector in 2020 on concerns that the coronavirus pandemic would punish the industry.

    Since then, he and his deputies have mostly avoided adding to his finance stakes, besides modest positions in Citigroup and Capital One.

    ‘Fear is contagious’

    Last May, Buffett told shareholders to expect more turbulence in banking. He said Berkshire could deploy more capital in the industry, if needed.

    “The situation in banking is very similar to what it’s always been in banking, which is that fear is contagious,” Buffett said. “Historically, sometimes the fear was justified, sometimes it wasn’t.”

    Wherever he placed his bet, the move will be seen as a boost to the company, perhaps even the sector, given Buffett’s track record of identifying value.

    It’s unclear how long regulators will allow Berkshire to shield its moves.

    “I’m hopeful he’ll reveal the name and talk about the strategy behind it,” Shanahan said. “The SEC’s patience can wear out, at some point it’ll look like Berkshire’s getting favorable treatment.”

    — CNBC’s Yun Li contributed to this report.

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