Warren’s Buffet of Buybacks

The Oracle of Omaha has spoken. Warren Buffet, the 90-year-old CEO of Berkshire Hathaway, announced on Saturday that net profit rose nearly 23% in 2020 on the year to $36 billion, or $23,015 per class A share. “I Paid Too…

Jennifer
Image Credit: iStock Images, Andrey Krav.
Sign up for insightful business news.

The Oracle of Omaha has spoken.

Warren Buffet, the 90-year-old CEO of Berkshire Hathaway, announced on Saturday that net profit rose nearly 23% in 2020 on the year to $36 billion, or $23,015 per class A share.

“I Paid Too Much”

Importantly, accounting rules require Berkshire to report changes in the value of its investments in companies such as Apple, Coca-Cola, and Verizon — creating swings in operating results.

Let’s dive into what else happened at Berkshire:

Buyback City: In his annual written address to shareholders, Buffett revealed his company repurchased a mammoth $25 billion in class A shares, the business equivalent of retweeting yourself:

  • Buffett said the buybacks were conducted to “enhance the intrinsic value per share for continuing shareholders” while ripping companies who repurchase stock “at simply any price,” calling them “embarrassing.”
  • In making the announcement, he quoted the classic American actress Mae West, who he called “sultry”: “Too much of a good thing can be…wonderful,” she once said.

Oops: Buffett did concede he overpaid for Precision Castparts, which he acquired for $37.2 billion five years ago, leading to a $10 billion writedown last year. “PCC is far from my first error of that sort. But it’s a big one,” he said.

“Disappointing:” Surprising to some, Buffett’s letter made only one passing reverence to the Covid-19 pandemic — one of the most significant economic events in history which had mammoth impacts on Buffett’s portfolio. Cathy Seifert, an analyst at CFRA Research, said. “that to me was striking. It was tone deaf and it was disappointing.”

Analysis more

Tale of the Tape: Warren Buffett and Cathie Wood

Farm Strong: Understanding Agriculture as an Investment

Recent News

Fandom Nabs TV Guide and Metacritic in Media Merger

Google Drops Translate App in China

Liz Truss Pulls Screeching U-turn on Plans to Cut Taxes for Britain’s Wealthiest

A Strong Dollar Could Save a Horrid M&A Environment

[subscribe-form listid="1ebbb697aaa44fb1971fe0a3c42ff841" source="organic" medium="organic" redirect-url="https://thedailyupside.com/thank-you/"]
<form action="" class="subscribe-form "> <input type="text" name="subscribe_form_email" placeholder="Enter your email"> <input type="text" name="subscribe_form_name" placeholder="Enter your name" value="" class="c-subscribe-from_field"> <button class="c-btn" id="subscribe-form-submit" type="submit">Subscribe</button> <div class="subscribe-form-message"></div> <div class="subscribe-form-vars"> <input type="hidden" class="subscribe-form-param" name="params[listid]" value="1ebbb697aaa44fb1971fe0a3c42ff841"> <input type="hidden" class="subscribe-form-param" name="params[source]" value="organic"> <input type="hidden" class="subscribe-form-param" name="params[medium]" value="organic"> <input type="hidden" class="subscribe-form-param" name="params[redirect_url]" value="https://thedailyupside.com/thank-you/"> </div> </form>