Warren Buffett's Fintech Buy, Modular Construction Business and Inflation

Investing

Published: June 11, 2021 8:29 am

Earlier this week, Warren Buffett and Berkshire Hathaway Inc. (NYSE: BRK-B) invested $500 million in a Brazilian digital bank. Famously cool to the world of fintech and digital money, Buffett’s investment took most people by surprise.

Over at Bloomberg, op-ed columnist Anjani Trivedi noted that Buffett has been dumping shares of traditional banks since last year. At the end of 2019, 41% of Berkshire’s portfolio of investments was concentrated in financial firms. At the end of 2020, that percentage had dropped to 23.6%.

[in-text-ad]

Does Buffett’s investment in Nubank signal that Berkshire is, from now on, going to plunge into digital banks and other fintech investments? Trivedi thinks Buffett’s goal is more modest:

Buffett’s fintech bet is less a testament to his beliefs about the future of banking than a hunt for standout growth potential, driven by consumers. Berkshire already owns a stake of around 4% in another Brazilian payments firm, StoneCo Ltd., and India’s Paytm. Buffett is looking for dislocations in the market, not just efficient money-churners with more or less diminishing to flat returns.

Berkshire-owned MiTek, a building industry company specializing in modular construction, is launching a new business to design and build sub-assembly components for building projects at hospitality, health care, education and multifamily residential construction sites.

The idea, according to building industry publication Construction Dive, is to create a model “similar to the flat-packing and shipping of consumer products that are then assembled by the end user, would solve one of modular’s biggest challenges — the transportation of factory-built units to jobsites where they are stacked together.” Think Ikea for buildings.

Finally, Bankrate.com has compiled a list of six suggestions from Buffett on how to beat inflation.

24/7 Wall St.
Why the 5 Highest-Yielding Dow Stocks Are Great Second-Half Buys

Take Charge of Your Retirement In Just A Few Minutes (Sponsor)

Retirement planning doesn’t have to feel overwhelming. The key is finding expert guidance—and SmartAsset’s simple quiz makes it easier than ever for you to connect with a vetted financial advisor.

Here’s how it works:

Answer a Few Simple Questions. Tell us a bit about your goals and preferences—it only takes a few minutes!
Get Matched with Vetted Advisors Our smart tool matches you with up to three pre-screened, vetted advisors who serve your area and are held to a fiduciary standard to act in your best interests. Click here to begin
Choose Your Fit Review their profiles, schedule an introductory call (or meet in person), and select the advisor who feel is right for you.

Why wait? Start building the retirement you’ve always dreamed of. Click here to get started today!