The legendary investor and Berkshire Hathaway CEO Warren Buffett turned 93 on Wednesday, August 30, 2023. Despite his age, Buffett has shown no signs of slowing down as he continues to make astute investments and grow his conglomerate to new heights.
Berkshire Hathaway hits record high
Berkshire Hathaway, the company that Buffett has been leading since 1965, has reached an all-time high on record operating profit. The stock has gained more than 20% this year, making it the biggest nontech company by market capitalization.
One of the reasons for Berkshire’s stellar performance is its massive cash pile, which stood at $147 billion at the end of June. With short-term interest rates topping 5%, Buffett is earning a substantial return on his cash holdings, which he can use to fund his future acquisitions or buybacks.
Another factor that has boosted Berkshire’s value is its stake in Apple, which has now taken up half of its equity portfolio. Apple has rallied 40% this year, making Berkshire well over $100 billion since 2016. Buffett has praised Apple as a consumer products company with loyal customers and strong buyback programs.
Buffett bets on Japan
Buffett has also surprised the market with his investment in five Japanese trading houses: Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo. He announced his stake in these companies last year and added to it earlier this year. He even traveled to Japan with his successor Greg Abel, his first time in more than 11 years, to meet with the heads of these firms and emphasize his support.
The investment in Japan is seen as a groundbreaking move by Buffett, who is known for his preference for American companies. The Japanese trading houses have a conglomerate structure similar to Berkshire, and they have been stable dividend payers and earnings growers. They also offer exposure to various sectors and regions, including energy, commodities, infrastructure and emerging markets.
Some analysts have praised Buffett’s bet on Japan as a brilliant trade that allows him to hedge currency risk by selling Japanese debt and pocketing the difference between dividends from the investments and bond coupon payments he pays out.
Buffett’s philanthropy and legacy
Buffett is not only a savvy investor but also a generous philanthropist. He has pledged to give away most of his fortune to charitable causes, mainly through the Bill & Melinda Gates Foundation. He has also inspired many other billionaires to join his Giving Pledge campaign, which encourages them to donate at least half of their wealth to charity.
Buffett has also been preparing for his succession plan, which he has said will be a smooth transition. He has named Abel as his likely successor as CEO of Berkshire, while Ajit Jain will oversee the insurance operations. He has also appointed Todd Combs and Ted Weschler as his investment managers, who will eventually take over the portfolio.
Buffett has said that he loves his job and has no plans to retire anytime soon. He has also assured his shareholders that Berkshire will continue to thrive after he is gone, thanks to its strong culture and values. As he celebrates his 93rd birthday, Buffett remains one of the most respected and admired investors in the world.