This is the work of a legend: Warren Buffett’s company wrote down $11 billion on its 2016 purchase of Precision Castparts which has been severely wounded due to the paralysis in the aerospace sector [Boeing aircrafts decommissioning due to defects, reduced orders associated with Covid lockdowns] . Yet, the company’s net profit rose 23% in the fourth quarter, to $35.8 billion. Many people have preached the market-sermons that the pandemic-fueled lockdowns benefited technology companies. Yet, from the Berkshire Hathaway’s data, it is evident that the American magic can work in any sector or domain. There is something evident here: ample diversification of a portfolio.
Warren Buffett’s trains struggled with the covid-19 paralysis but in my estimation, its insurance business made tons of money, since lockdowns practically meant there were limited accidents since people were not on the roads. Yet, despite having those cars parked at homes, people paid premiums which are required by most state laws. So, the premiums were paid but accidents did not happen, meaning that claims were not leaving the treasury of Buffett’s empire. Those reduced claims are part of the huge profits recorded by the firm.
Head, you win. Tail, you win. That is the cornerstone of a balanced portfolio with the $120 billion Apple investment supporting!
Billionaire investor Warren Buffett’s record buyback spree of his own conglomerate’s stock is continuing in 2021, and he’s acknowledging a “big mistake” in his annual letter to investors. Buffett says Berkshire Hathaway bought back about $9 billion of its own shares in the fourth quarter, bringing the total 2020 buyback to almost $25 billion. He also acknowledged an “ugly $11 billion write-down” stemming from the purchase of an aerospace parts company in 2016. Buffett warned that the fixed-income market faces a “bleak future,” but he reassured investors to “never bet against America.”
Of course, Warren Buffett is also well loaded on technology via Apple. “Berkshire’s $120 billion investment in Apple Inc. stock has become so valuable that Buffett places it in the same category as the sprawling railroad business he spent a decade building. He began building a stake in the iPhone maker in 2016, and spent just $31.1 billion acquiring it all. The surge in value since then places it among the company’s top three assets, alongside his insurers and BNSF, the U.S. railroad purchase completed in 2010, according to the annual letter.”---
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