Warren Buffett’s Berkshire Hathaway reported an operating profit of $ 7.3 billion in the last quarter of 2021. This is a 45% increase over the same period last year. At the same time, the company reported a repurchase of $ 6.9 billion worth of shares. The value of the company on Wall Street is $ 708 billion.
Repurchases in 2021 peaked at $ 27 billion, compared to $ 24.7 billion in 2020. In the last quarter, there was a slight decrease in repurchases, and it turns out that from the beginning of the year, purchases amounted to only $ 1.2 billion. Buffett explains in the annual letter – “Our appetite remains large but will always remain price dependent.”
Berkshire holds a huge amount of cash totaling nearly $ 147 billion at the end of 2021, a slight drop from $ 149 billion on September 30th. Buffett continues to find few new investment opportunities and has struggled to find significant buying targets in recent years as he waits for what he called an “elephant-sized” deal.
Berkshire acquired businesses for less than $ 500 million in 2021, down from $ 2.5 billion in 2020. Berkshire’s only major deal in the last decade was the $ 32 billion acquisition of Precision Castparts, which closed in 2016.
The most notable holding – Apple
Buffett wrote in a letter to investors that Apple is one of the four pillars of Berkshire investing – “Tim Cook, Apple’s brilliant CEO, sees Apple product users as his first love, but all investors enjoy his managerial touch.”
Berkshire holds 5.55% of Apple’s shares, a holding that grew in parallel with Apple’s own acquisitions. Buffett began investing in Apple in 2016, when the total investment was $ 36 billion and is currently worth $ 160 billion, about 405 of the company’s investment portfolio.
And what does Buffett do with cash?
About $ 120 billion of the $ 147 billion in cash held by U.S. government bonds is short-lived. Pay attention for a short time. Buffett knows that long-term bonds are risky – a rise in interest rates will raise yields (lower bond prices), when in practice this has already happened in the last six months in part.
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