Investing.com - Annual Message of the Head of the Berkshire Hathaway B Corporation (NYSE: BRKB) to shareholders this year caused conflicting disputes and even disappointment, and the reason for this was the fact that despite the coverage of the disaster that was hit by the whole world last year, the pandemic was mentioned in the past year The report Warren Buffett is only once, and that is due to the temporary forced closure of one of its furniture companies.
Buffett also chose to refrain from politics, despite the scandalous presidential elections and unrest in the US Capitol. Usually offering investors help in understanding their views on various political topics and trends in the market, in addition to detailed information about how things are at its conglomerate, this time the 90-year-old investor behaved strangely, especially against the background of many problems faced with Americans, writes Bloomberg.
According to Katie Zheefert, Analytics CFRA Research, "The leader who enjoys such great respect, whose opinion is of great importance that owns enterprises that directly affected the pandemic, as well as insurance companies that affected global warming and social inflation, did not say a word About pandemic. It struck me and disappointed. "
But some investors are inclined to justify the Buffett: So, according to Jim Shanhana, Analytics Edward D. Jones & Co., the head of Berkshire carefully plays his words, and some topics, such as pandemic, risk to grow into a very controversial political discussion, which in the last Years he try to avoid.
However, several important conclusions can be made from the annual report of the Buffeta:
1. Buffett rely on the reverse ransom of shares, and not on new transactions
Thus, Berkshire Conglomerate bought out his own shares on a record $ 24.7 billion while Buffett tried to find the best ways to invest her money. In his letter, he pointed out that his company "did not make significant acquisitions" in 2020, having achieved a little progress in reducing the money supply, which decreased by only 5% in the fourth quarter of last year to $ 138.3 billion. In recent years, Berkshire has got rid of Cash faster than could find more profitable assets to purchase, which led to a sharp increase in stock ransom.
According to Buffetta, "the ownership of shares is a game with a positive sum." "Even the patient and reasonable monkey, gathered a portfolio with a throwing of 50 darts in the target with companies from S & P 500, will receive dividends and capital gains over time," he wrote.
2. Apple Share has the same value for Berkshire as BNSF Railways
Berkshire investment in Apple Inc. stock (NASDAQ: AAPL) in the amount of $ 120 billion purchased value for Buffet the value similar to the one that and its branched railway business with BNSF - railways, which he bought in 2010. He began to increase his share in Apple in 2016 and spent only $ 31.1 billion to acquire all his share. Perhaps he was somewhat slightly, stating that he did not make investments in technology, as it was not well understood in relevant companies. In addition to Apple, his company also has increased its share in Amazon.com Inc (NASDAQ: AMZN).
3. Buffett made a mistake by purchasing for $ 37.2 billion Precision CastParts
"I paid too much for the company. In no way was misled - I was simply too optimistic about the potential of the PCC profit, "he said.
This manufacturer of equipment for the aerospace and energy industry from Portland, he bought 5 years ago.
As a result of the pandemic, Precision CastParts faced difficulties, since the demand for flights dropped sharply, and airlines had to hide airplanes and reduce the schedule, and a smaller number of flights meant a decrease in demand for spare parts and new aircraft, as a result of which Berkshire wrote losses $ 11 billion Last year.
4. Despite the epidemic, Berkshire increased profits due to the railway and manufacturers
Despite the continuation of the influence of the pandemic, the consequences of which feels the entire complex of enterprises Berkshire, Conglomerate in the fourth quarter increased the operating profit by almost 14% compared with the same period a year earlier thanks to the record profit of the BNSF railway company since 2010 and effective production operations from 2010 mid 2019.
5. The annual meeting of shareholders will not be held in Omaha, but in Los Angeles
For many years, the annual Berkshire meeting has attracted a crowd of Buffett fans in Omaha, Nebraska, where its conglomerate is based. But since this year, the event (while in the virtual format) will be held in Los Angeles.
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