Record-level buybacks: US star investor Buffett weakens at year-end

The US star investor Warren Buffett earned considerably less with his investment company Berkshire Hathaway at the end of the year.

In the three months to the end of December, operating profit fell 23 percent year-over-year to $ 4.4 billion (€ 4.1 billion), according to Berkshire Hathaway in Omaha. Things went particularly badly in the reinsurance business – an important pillar of Buffett’s conglomerate.

Meanwhile, Buffett remains under high pressure to invest the excess Berkshire Hathaway money. At the end of the year, cash reserves continued to be an enormous $ 128 billion. Shareholders have longed for the next big takeover. Instead, Buffett is relying more and more on share buybacks – a record $ 2.2 billion was spent in the final quarter.

In his annual letter to shareholders, 89-year-old Buffett also raised questions about the future of Berkshire when he and his 96-year-old vice president Charlie Munger resigned. “Shareholders don’t have to worry: Our company is 100 percent prepared.” Younger Berkshire managers Ajit Jain and Greg Abel are big favorites to succeed one day.

Berkshire Hathaway’s net income was $ 29.2 billion in the most recent quarter, following a loss of $ 25.4 billion in the same period last year. However, Buffett always recommends not paying much attention to this number. By showing unrealized investment profits, it fluctuates greatly and has little meaning with regard to the actual course of business.

Berkshire Hathaway owns around 90 companies, and there are also various stock packages from large listed companies such as Coca-Cola, Wells Fargo and Apple – the iPhone group has now become Buffett’s favorite. The investor legend called the “Oracle of Omaha” because of its smell for lucrative investments has led the conglomerate for more than 50 years. “Forbes” estimates Buffett’s assets at around $ 90.2 billion.

For 2019 as a whole, Berkshire Hathaway’s operating profit fell three percent to $ 24.0 billion. Net income reached a new record high of $ 81.4 billion thanks to strong gains in some equity investments. Nonetheless, it was a rather difficult year for Buffett in general, when Berkshire Hathaway’s shares, with a price increase of just 10.9 percent, underperformed the booming US stock exchanges as a whole.

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