As a long-term investor, Warren Buffett consistently complains that quarterly results don’t reflect the true performance of Berkshire Hathaway, his investment group. When collecting the fluctuations in the value of investments on the stock market, the numbers go up and down with prices. Buffett prefers to look at operational developments. In the first quarter of this year, both have improved. Net income is multiplied nearly sevenfold to $35,504 million (approximately €31,700 million at current exchange rates), while operating income improves 13% to $8,065 million. Good news for the thousands of shareholders who made the pilgrimage to Omaha, Nebraska this weekend for the company’s annual meeting.
Thousands of investors gather at a gym this Saturday to hear advice from Buffet, 92, and his partner Charlie Munger, 99. For biological reasons, there aren’t many meetings left where the duo will present one of capitalism’s busiest shows. A year ago, the clearest message from Buffett and Munger was that they didn’t like bitcoin and cryptocurrencies. A year later, several of the sector’s key companies have collapsed and the stock price bubble has deflated.
Before the session begins, Berkshire Hathaway presents its quarterly results. Of the $35,500 million in profits this year, there are $8,065 million in operating profit and $27,439 million in investment profit, including $23,700 million in unrealized deferred capital gains. The company insists on downplaying these figures: “The level of investment gains (losses) in any given quarter is often meaningless, resulting in net earnings per share that can be very misleading to investors with little or no knowledge of accounting standards,” it said he in a statement.
In the first quarter of this year, it was the surge in the Apple Stock Market, the group’s main investment, that acted as a profit driver, just as it caused losses in several quarters last year. Apple is near its all-time highs, and Warren Buffett is making huge capital gains on this investment.
Berkshire Hathaway’s full earnings report for the first quarter shows that Warren Buffett’s group took advantage of the market rally to sell in the first three months of the year. He sold securities for $13,283 million and bought for just $2,873 million. He preferred to invest in fixed-income securities and bought back his own stock for around $4,400 million.
The Company has an equity portfolio valued at $328,161 million, of which $206,819 million is deferred capital gains. 77% of its investments are concentrated in five stocks: Apple (151,000 million), Bank of America (29,500 million), American Express (25,000 million), Coca-Cola (24,800 million) and Chevron (21,600 million). The group also has an additional 130,000 million in cash.
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