The entrepreneur’s conglomerate, whose investments are always monitored, bet on the fast food chain, a few months after selling shares in Apple and Bank of America en masse.
The conglomerate of American billionaire Warren Buffett has invested 549 million dollars (521 million euros) in the fast food chain Domino’s Pizza, according to documents communicated to the American stock exchange watchdog on Thursday 14 November, released by Reuters. Berkshire Hathaway took control of 1.28 million shares of the company, or 3.6% of the stock, sending the price of Domino’s Pizza up more than 7% after the announcement. The businessman also acquired a 1% stake in swimming pool equipment distributor Pool Corp, for $152 million, pushing the price up more than 5% again.
Berkshire Hathaway had sold its shares in several other companies in recent months, including Apple. Warren Buffett’s conglomerate sold a quarter of its shares in the tech giant over the summer, but still owns nearly $70 billion worth of stock in the Cupertino company, its largest stake. In recent months, Bank of America shares have also sold, falling below 10% of the capital. At the beginning of autumn, thanks to these large sales, Berkshire Hathaway had a mountain of liquidity, with 325 billion dollars.
Guru of modern capitalism
A former textile SME that Warren Buffett took control of in 1965, Berkshire Hathaway has become, through acquisitions, a gigantic conglomerate, which today owns, among other things, the insurer Geico, the railway company Burlington Northern Santa Fe (BNSF), the ready-to-wear company branded Fruit of the Loom or Duracell batteries. He is also a large investor, controlling 21% of American Express, 13% of Bank of America (as of late June) and 9% of Coca-Cola.
Inspired by his accomplice Charlie Munger, who accompanied him from 1978 until his death in November 2023, Warren Buffett adopted a rational and impartial approach to investments, often based on a long-term strategy, going against the short-term tendency of many market players. Their investment philosophy has become so popular that Warren Buffet is now considered one of the gurus of modern capitalism. Every year, thousands of people come to hear him review the past financial year and share his thoughts at the Berkshire Hathaway AGM in Omaha, Nebraska, his hometown where he still resides.
Between 1965 and 2023, Berkshire Hathaway shares gained an average of 19.8% per year and nearly 4,400% in total. Which makes the billionaire the sixth richest person in the world, according to a real-time ranking drawn up by the Forbes magazine website. At 94, Warren Buffett is still CEO of Berkshire Hathaway. In 2021, however, he appointed a successor, in the person of Greg Abel, 62, now vice president of the group.
– How does investor sentiment shift in response to Berkshire Hathaway’s investment decisions?
Interview between Time.news Editor and Investment Expert
Time.news Editor: Welcome to Time.news! Today, we have the pleasure of speaking with Dr. Emily Stenson, a renowned expert in investment strategies and market trends. Emily, thank you for joining us today.
Dr. Emily Stenson: Thank you for having me. I’m excited to discuss the latest moves by Warren Buffett’s conglomerate, Berkshire Hathaway.
Editor: Recently, Berkshire Hathaway made headlines with their substantial investment in Domino’s Pizza, purchasing 1.28 million shares for $549 million. What do you think motivated this investment?
Dr. Stenson: Warren Buffett is known for his disciplined investment approach, often seeking companies with strong fundamentals and growth potential. Domino’s Pizza has demonstrated resilience and innovation in the fast-food sector, especially with its technological integration for delivery and online ordering. The company’s ability to stay relevant in a competitive landscape makes it an attractive target.
Editor: It’s interesting to note that this investment comes shortly after Berkshire sold off a significant portion of its shares in tech giants like Apple and Bank of America. How do you interpret this shift in their strategy?
Dr. Stenson: The sale of shares in major tech companies, particularly Apple, suggests a strategic reallocation of resources. Despite still holding nearly $70 billion in Apple stock, Buffett likely found better immediate prospects in other sectors. This is part of his strategy to maintain liquidity—as I understand, Berkshire now has around $325 billion in cash on hand. The fast-food sector, particularly with enduring brands like Domino’s, provides a blend of growth and stability.
Editor: With the market’s reaction to these announcements—a 7% spike in Domino’s Pizza shares and a significant rise for Pool Corp as well—how do you believe Buffett’s reputation influences investor sentiment?
Dr. Stenson: Buffett is often viewed as a “guru of modern capitalism,” and his moves can create ripples in the market. When investors see Berkshire Hathaway take a substantial stake in a company, they can be more inclined to follow suit, believing that Buffett has done his due diligence. His historical success in identifying undervalued assets plays a big role in shaping market perceptions.
Editor: Speaking of historical success, Buffett’s journey started with a humble textile company. How important do you think his background in smaller industries is when evaluating larger investments today?
Dr. Stenson: Buffett’s early experiences have profoundly shaped his investment philosophy. He values companies that have a solid competitive advantage, regardless of the industry size. His history also emphasizes the importance of financial metrics and long-term viability over quick gains. This foundational understanding allows him to spot opportunities that others may overlook.
Editor: Fascinating insights, Dr. Stenson! As we look to the future, do you think we will see more diversification from Berkshire Hathaway, especially in response to evolving market conditions?
Dr. Stenson: Absolutely. The current economic landscape is shifting, and there’s growing interest in sectors like renewable energy, technology, and consumer goods. As consumer behavior continues to evolve, I expect Berkshire will adapt, possibly considering investments in emerging markets or new technologies. Buffett has always been an early mover when it comes to identifying trends.
Editor: Thank you, Dr. Stenson, for sharing your expertise on Buffett and Berkshire Hathaway’s latest strategies. Your insights are invaluable as we navigate the fast-evolving investment landscape.
Dr. Stenson: Thank you for having me! It’s always a pleasure to discuss these important topics.