For stock investors, the now 88-year-old Warren Buffett is something of a Saint, or at least a kind of magician. In 1942 he bought when he was eleven, his first three shares. In 1956, he acquired Berkshire Hathaway – at the time a serbelndes textile company and an investment vehicle built. Its shares have since outperformed the U.S. stock market (as measured by the broad S&P 500 Index) by almost 2.5 million points. Today, Buffett is with an estimated fortune of $ 86 billion as the third-richest man in the world.
On 4. To be held in Omaha, the headquarters of Berkshire Hathaway, the next shareholders ‘meeting, are expected to be 40’000 shareholders who want to hear every year what is called the “Oracle of Omaha,” as Buffett is full of awe – tell them again about the capital market and the world.
In the run-up to the meeting is managed by the British “Financial Times” to get an in-depth Interview with him. In about three hours, he rarely speaks with Newspapers and has taken the time to do this. The topic of his succession, his investment style and the problems which bring a company assets of more than $ 700 billion – more than 110 billion in cash and cash – like investments-with itself.
No thought of resignation
Despite his age, Buffett makes it clear that he would like to make for long. He says with his charity “more Fun than any other 88-Year-old in the world,” he said. He still lives in the same house he bought in 1950, and working at the same Desk that his father 75 years ago, has already used. A minimum of three times per week, he feeds according to their own data in the case of McDonald’s Chicken Nuggets. And with only 25 employees Berkshire Hathaway, occupies a single floor of an office building in Omaha.
As a favorite for the succession at the top of the 56-year-old Greg Abel, who currently oversees all investments outside of the major insurance division of Berkshire, and on the other hand, the India – born 67-year-old Ajit Jain, a Cousin of the former Deutsche Bank Co-head Anshu Jain is on the one hand. Has chosen the two, however, the 95-year-old Charlie Munger, Buffett’s Deputy and his closest Confidant. Buffett himself makes clear that he is especially interested in the special culture of Berkshire is preserved, and both of them had this “in the blood”, he said in an earlier television interview. If he’ll resign once, death or beheaded will, may appoint the Board of Directors, his successor, within a day, he said in the same conversation in his usual ironic art.
Buffett does not believe that the success of the company will suffer without him and his name, very familiar, he is the culture at Berkshire Hathaway. Once he’s gone, is to be expected that it would come because of “a Parade of investment bankers with “Bullshit ideas” to split”. However, for a long time no one in the company would bend to this pressure, is convinced the star investor.
The Size as a Problem
compared to previous years, Buffett with his plants, however, are significantly less successful. An investment in Berkshire ten years ago has doubled since then, more than. The S&P 500 Index has eight in the same time, but more than tripled. In the ten years after 1999, Buffett’s to put the title in spite of Dotcom and financial crisis, around 80 percent, while the broad equity market as measured by the S&P suffered 500 Index losses.
especially from the financial crisis has benefited Buffett. The ability, company cheap buy, or with cash injections to prop up the fall in Liquiditätsnot, has brought his company’s high profits. An example is the investment Bank Goldman Sachs, had to pay interest on the money to 10 percent, other Swiss Re. In the Swiss reinsurance of the Investor, a shot in 2009, 3 billion Swiss francs, at an interest rate of 12 percent.
One reason for the difficulties since then is that more and more other investment vehicles adopt the investment style of Buffett – buying stocks of large companies with a comprehensible business model, and with a strong competitive position, these companies can not be easily displaced. However, Berkshire has a second Problem: Given the achievements in investment sum of more than $ 700 billion, investment must also be very large, so that the yield moved significantly.
The money stays in the company
Buffett shows this with a comparison: When he buys a company for a billion and its value to 50 percent increases, increases the value of the entire Berkshire portfolio is only a tenth of a percent. And because private Equity firms involved in the business, the recording of liabilities also undervalued companies to buy up, to decline also, therefore, for Buffett, the opportunities for exceptional gains by such purchases.
Despite the problems with its Size, Berkshire pays no dividends to its shareholders – they have rejected a proposal for such distributions in the year of 2014. Last year, Berkshire has bought at least shares in the amount of 1.3 billion dollars. Buffett’s statement in the Interview, that a time could come in which he could buy back for $ 100 billion a shares, has immediately made headlines in the financial portals. (Editorial Tamedia)
Created: 29.04.2019, 12:56 PM