March 2, 2024

Warren Buffett’s firm spends $107 billion on stocks, sets record for buybacks

Warren Buffett buys back stocksWarren Buffett buys back stocks

Berkshire Hathaway’s latest annual report shows that the company continues to invest heavily despite the challenges brought about by the pandemic.

The report reveals that the company has invested nearly $90 billion since 2020, a significant amount of money in the current economic climate.

One interesting aspect of Berkshire Hathaway’s investments is that the company has been very active in buying and selling stocks.

Bold and definitive moves

The firm spent around $107 billion on stocks in the last three years but sold about $88 billion of that, resulting in a net outlay of $18 billion. This shows that the company is not afraid to make bold moves when it comes to its investments.

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Another notable aspect of the report is the company’s significant spending on stock buybacks. Berkshire Hathaway spent an unprecedented $25 billion on stock buybacks in 2020 and set a new record of $27 billion in 2021. This is a clear indication that the company’s management believes in the long-term value of its stock and is willing to invest significant resources in supporting it.

Long term growth

The acquisition of insurance firm Alleghany for about $12 billion adds to the company’s total spending, bringing it to around $89.5 billion. This demonstrates the company’s confidence in its ability to make strategic acquisitions that will contribute to its long-term growth.

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Despite the enormous scale of the company’s spending spree, Berkshire Hathaway still ended 2021 with $129 billion in cash and short-term investments.

This reflects Warren Buffett’s pandemic decisions, which mirror those made during the 2008 financial crisis. During that time, Buffett made some of his most lucrative bets by investing in companies that were undervalued and poised for growth.

Overall, the report shows that Berkshire Hathaway is continuing to make strategic investments despite the challenging economic climate.

The company’s willingness to invest heavily in its own stock, make strategic acquisitions, and hold significant amounts of cash and short-term investments, reflects its confidence in its long-term prospects.

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