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Warren Buffett’s net worth has risen by $15 billion this year to $157 billion, making him the world’s seventh richest person, according to the Bloomberg Billionaires Index. Much of the increase is due to extraordinary Berkshire Hathaway Inc. (NYSE: BRK-B) earnings released a few days ago.
24/7 Wall St. Key Points:
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Warren Buffett’s net worth has risen by $15 billion so far this year.
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This is due in part to an extraordinary earnings report from Berkshire Hathaway Inc. (NYSE: BRK-B).
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The quarterly report lifted shares by 5%, bringing this year’s increase to 11%. The S&P 500 is flat for the same period. In the fourth quarter, the conglomerate’s earnings totaled $14.5 billion, up 71% from the same quarter the year before. The company’s stock hit an all-time high afterward.
The $15 billion increase in Buffett’s wealth can almost completely be attributed to the value of Berkshire’s shares. He started the company in 1970. A $10,000 investment in the stock 30 years ago would be worth close to $700,000 today.
Berkshire currently holds $334 billion in cash, which a Bloomberg reporter said means he is worried about a large market downturn or is just looking for something inexpensive to buy.
Buffett’s Investments
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Buffett primarily buys public companies with strong brands that he thinks are undervalued. Today, those include Coca-Cola Co. (NYSE: KO). Recently, he sold Bank of America Corp. (NYSE: BAC). More rarely, he has not held stocks for long periods. The best example is Apple Inc. (NASDAQ: AAPL). He bought the stock in 2016 and has sold shares over many quarters since then–after making a large profit.
Buffett also purchased public companies and then took them private. He bought the railroad Burlington Northern Santa Fe in 2010. He also purchased the insurance company Geico in 1995. After the Geico deal closed, he commented, “It’s the low-cost operator in a field that is very big, and the low-cost operator tends to win over time.”
Buffett has bought companies that did not fit his usual pattern. In 1983, he purchased Nebraska Furniture Mart for $60 million, and in 2014, he bought the Miami-based TV station WPLG.
Buffett favors insurance companies. Besides Geico, he owns Berkshire Hathaway Reinsurance Group, National Indemnity Company, and Berkshire Hathaway Specialty Insurance, which focuses on business and commercial insurance.
Describing these investments, he said, “It’s so much fun because you get the money at the start, you know, and then you find out whether you’ve done something stupid later on.
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