Warren Buffett, the esteemed Chairman and CEO of Berkshire Hathaway, has been a driving force in the company since taking control in 1965. Now, at the age of 93, he stands as the “Oracle of Omaha” and continues to lead a conglomerate that is stronger than ever.
Berkshire Hathaway shares have surged to an all-time high, bolstered by record operating profit. This has solidified the company’s position as the largest nontech company by market capitalization. Buffett’s strategic moves over the past year, including investing in undervalued Japanese stocks and navigating interest rate fluctuations, have further showcased his prowess in the investing world.
David Kass, a finance professor at the University of Maryland’s Robert H. Smith School of Business, attests to Buffett’s enduring capabilities, stating, “He’s still at the top of his game. His mental acuity is sharp as ever.”
One notable aspect of Buffett’s recent success is his ability to capitalize on higher interest rates. With a massive cash reserve of $147 billion, he has been able to earn a substantial return as short-term rates exceed 5%. This has allayed concerns about the large cash pile and contributed to Berkshire’s continued growth.
Additionally, Buffett’s investment in Apple has played a significant role in Berkshire’s portfolio. With Apple now comprising half of the company’s equity holdings, its 40% rally this year has generated considerable profits. Buffett sees Apple as more than just a tech company, comparing it to a consumer products business. He has also been attracted to Apple’s substantial buyback programs, which further enhance the company’s value.
‘Groundbreaking’ investment
Buffett’s foray into the Japanese market has also garnered attention. He increased his stakes in five Japanese trading houses, a move that earned him praise from Chamath Palihapitiya, who referred to Buffett as “the GOAT” (Greatest of All Time). Buffett even visited Japan with his successor Greg Abel to demonstrate his support for these firms. Kass notes the significance of this investment, as few prominent investors have ventured into the Japanese market. The stability and dividend growth of these companies, which have a similar conglomerate structure to Berkshire, have positioned them as attractive opportunities for Buffett.
A born leader
Buffett’s leadership skills were on display at Berkshire’s annual meeting in May. During the six-hour event, he and his business partner Charlie Munger addressed various topics of interest to investors, showcasing their intellectual clarity and ability to provide valuable insights. Macrae Sykes, portfolio manager of the Gabelli Financial Services Opportunities ETF, emphasizes the impact of Buffett’s presence, stating, “Just his presence really demands operating accountability and alignment with the brand.”
As for Charlie Munger, the vice chairman of Berkshire, he will turn 100 on New Year’s Day, further highlighting the longevity and success of Buffett’s partnership.
Unmatched track record
Buffett’s track record speaks volumes about his investing acumen. Over the years, Berkshire Hathaway has outperformed the S&P 500, delivering a compound annual gain of 19.8% compared to the benchmark’s 9.9%. This translates to an overall total return of 3,787,464% for Berkshire Hathaway shareholders. Buffett’s preferred holding period remains “forever,” demonstrating his long-term investment philosophy and infinite time horizon even at the age of 93.
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