According to the Bloomberg Billionaire Index, Warren Buffett’s net worth increased by $19 billion this year. That moves him to $161 billion, ahead of his friend Bill Gates, who co-founded Microsoft (NASDAQ: MSFT) and has a net worth of $160 billion.
The $19 billion increase is primarily due to the value of Berkshire Hathaway Inc. (NYSE: BRK-B), which is the foundation of his wealth. He started the company in 1970. A $10,000 invested in Berkshire 30 years ago would be worth $682,000 today.
So far this year, Berkshire’s stock is up just over 13%, compared to 4% drop for the S&P 500. Over the past five years, the shares have gained 162%, compared to 108% for the S&P 500.
Buffett mostly buys public companies with strong brands that he thinks are undervalued. He has been a long-term holder of Coca-Cola Co. (NYSE: KO) and, until recently, 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 first bought the stock in 2016, and he dumped it recently.
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 favors insurance companies. 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 find out whether you’ve done something stupid later on.”
Buffett 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 currently holds $325 billion in cash, which a Bloomberg reporter wrote means he is worried about a large market downturn or just looking for something inexpensive.
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