In What Has Warren Buffett Invested His Cash?

In What Has Warren Buffett Invested His Cash?
Underwater by Julian Cohen. Why?

Warren Buffett, perhaps the world’s most famous investor, recently had a novel idea for where to invest his company’s cash, as you can see below.

Also, Check Out The Wonderful Illustrations Below To See Warren Buffett’s Life Story In Graphics: It’s ‘Education Gold’ For Every Investor

So How Did Warren Buffett Invest His Cash?

He bought his own stock … Berkshire Hathaway.

Berkshire relaxed its buyback policy in July 2018, allowing chairman and CEO Warren Buffett and vice president Charlie Munger to repurchase the company’s own stock whenever it, in their minds, fell below its “intrinsic value”. 

Previously, buybacks were more restricted, based on the firm’s book value per share.

On 3 November 2018, Buffett’s company reported that it repurchased $928 million of its shares in August.

Berkshire has around $100 billion in cash available to invest, so the purchase won’t put much of a dent in its balance.

Still, it either sends a signal that Buffett can’t find anything else worth buying at the moment, or he thinks the market is undervaluing his own company’s shares.

Apart from increasing its stake in Apple to around $46.6 billion earlier this year, Berkshire hasn’t made a major investment since it bought Precision Castparts for $32 billion in 2016.

Perhaps it means he could be lining up to make another large company acquisition.  That's the view expressed in the video below.

The buyback announcement came as Berkshire delivered a dazzling third-quarter earnings report. 

Its operating profit doubled to $6.9 billion, boosted by lower taxes and few natural disasters to drag down its insurance businesses.

When added to the paper profits implied by gain in value of the company’s large investment portfolio, Berkshire racked up a whopping $18.5 billion profit in the third quarter.

If history is any judge, Buffett and his Berkshire colleagues have a good sense of when their stock might be undervalued.

The last time Berkshire opted for share buybacks was in December 2012.  Then, the shares gained over 140 per cent while the S&P 500 climbed just 92 per cent.

When Buffett Is Buying Berkshire Stock, Here Are Four Reasons To Take Notice

1. He believes it’s trading well below his estimate of intrinsic value.

2. In light of his unparalleled track record, investors rightly pay attention when he says a stock is cheap, and he puts his money where is mouth is.

3. It represents one of the most compelling opportunities among all large-cap stocks in the world.

4. It’s a rare event, having only done it once before in his nearly half-century of running Berkshire, and investors significantly outgrew the market then.

Here's Another View On Why Buffett Bought His Shares

The Life Of Warren Buffett In Graphics

Warren Buffett, the “Oracle of Omaha”, needs no introduction.

With a self-made net worth of tens of billions, many consider Buffett to be the greatest investor of all time.

Yet despite his incredible achievements and decades in the public eye, the modest mid-westerner is frugal, relatable, and full of humility.  His life story is an endless source of lessons to investors and aspiring business professionals around the world.

Here’s a wonderful collection of infographics to enjoy and from which to learn.

Thanks: Visual Capitalist

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