Warren Buffett is the sole member of the world’s top 10 billionaires to see his wealth drop this year.
Berkshire Hathaway stock is trailing the S&P 500’s 5% gain and the Nasdaq’s 10% jump this month.
Buffett’s company beat the market last year as investors braced for the worst.
Warren Buffett is the only one of the world’s 10 wealthiest people to see his fortune shrink this year, as his Berkshire Hathaway conglomerate is left out in the cold by the stock market’s latest rally.
Buffett’s net worth has dropped by $529 million to $107 billion since the start of January, according to the Bloomberg Billionaires Index. The decline reflects an almost 1% dip in Berkshire’s stock price this year, compared with a 5% gain for the benchmark S&P 500 index and a 10% increase in the Nasdaq Composite.
In contrast, LVMH CEO Bernard Arnault’s wealth has grown by $27 billion to $189 billion, while Tesla CEO Elon Musk’s fortune has rebounded by $23 billion to $160 billion as of Monday’s market close. Their respective gains reflect a 14% rise in the luxury conglomerate’s stock and a 54% surge in the automaker’s shares this year.
Warren Buffett’s luck changed this year, allowing him to spend a record sum on stocks and end his deal drought. Here are his 6 highlights of 2022.
Warren Buffett spent a record sum on stocks and made a major acquisition in 2022.
The Berkshire Hathaway CEO tore into bitcoin, adjusted some overseas bets, and gave a surprise gift.
Here are the investing icon’s 6 highlights of 2022.
Warren Buffett’s luck changed in 2022. After years of battling to find bargains and watching Berkshire Hathaway‘s cash stack up, the famed investor seized his chance to put his conglomerate’s mountain of money to work.
Buffett spent a record sum on stocks, executed a major acquisition, and made some striking changes to his overseas bets. He also crowed about four of Berkshire’s key holdings in his yearly letter, trashed bitcoin at the annual shareholders’ meeting, and made a surprise donation to his children’s charities.
Here are Buffett’s 6 highlights from 2022:
The annual letter
Buffett published his famous annual letter to Berkshire shareholders in February.
The investor vented his frustration with Berkshire’s mammoth $144 billion cash pile, blaming a lack of bargains in the stock market. He also celebrated the “Four Giants” among Berkshire’s businesses: insurance, railroads, energy, and its enormous Apple stake.
Moreover, Buffett appeared to respond to criticism of his tax practices by noting Berkshire paid $3.3 billion of federal income tax in 2021 — nearly 1% of all the corporate income taxes collected by the US government that year.
Buffett struck a deal to buy Alleghany for nearly $12 billion in March. Berkshire completed its takeover of the insurer in October, ending a years-long drought on the acquisition front.
The investor showcased his trademark approach to dealmaking, which prizes trust and simplicity. He proposed the merger over dinner with Alleghany’s CEO, who previously ran a Berkshire subsidiary, and the pair formally announced a deal less than two weeks later.
Buffet also refused to budge on the deal terms, and when Alleghany enlisted Goldman Sachs as a financial advisor, he insisted the investment bank’s fee was subtracted from Berkshire’s offer price.
An epic buying spree
Berkshire plowed a net $41 billion into stocks in the first quarter of 2022, setting a new record for its quarterly spending on equities.
Buffett and his team built large stakes in HP, Chevron, Occidental Petroleum, Citigroup, Paramount, and Taiwan Semiconductor in the first nine months of 2022. Berkshire also spent over $5 billion on buybacks and made other sizeable purchases, lifting its spending on stocks and acquisitions for the year to an astounding $70 billion or so.
The annual meeting
Buffett hosted Berkshire’s annual shareholder meeting in his hometown of Omaha, Nebraska in April, after two years of virtual gatherings due to the pandemic.
The investor called out the reckless speculation in the stock market, underlined the grave threat posed by inflation, and declared he wouldn’t pay $25 for all the bitcoin in the world.
Buffett made some big moves in 2022 that deserve special attention. For example, he poured a total of about $30 billion into Chevron and Occidental, propelling the pair of oil-and-gas companies onto the list of Berkshire’s most-valuable holdings.
The investor and his team also revealed in November they had boosted their billion-dollar bets on Japan’s five largest trading houses.
In contrast, they sold BYD shares for the first time in 14 years. Berkshire has now slashed its position in the Chinese electric-vehicle maker by around 22%, and pocketed an estimated $1.2 billion profit from the disposals.
An unexpected gift
Buffett made his usual annual donation of Berkshire stock in June, dividing the $4 billion gift between the Bill & Melinda Gates Foundation and four of his family’s charities.
Unexpectedly, he contributed a further $759 million worth of Berkshire stock to his three children’s foundations for Thanksgiving, saying he was proud of their charitable work and wanted to show his appreciation.
7/7 SLIDES
Similarly, Amazon founder Jeff Bezos’ net worth has jumped by $17 billion to $124 billion, and Microsoft cofounder Bill Gates rounds out the top five with a modest $2 billion gain to $111 billion. Amazon stock has jumped 17% this year, while Microsoft stock has inched up 1%.
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Oracle chairman Larry Ellison, Alphabet cofounders Sergey Brin and Larry Page, former Microsoft CEO Steve Ballmer, and Mexican telecoms mogul Carlos Slim have all seen their fortunes swell too, as their sizeable stakes in their companies have risen in value.
Buffett’s rich-list peers have made money on paper this year thanks to a positive turn in market sentiment.
Investors dumped riskier stocks last year in response to a historic spike in inflation, a flurry of interest-rate hikes by the Federal Reserve, and the looming threat of an economic recession in the US. They appear to have regained their risk appetites this year as inflation appears to be cooling, fanning hopes of an early end to the Fed’s rate hikes and a soft landing for the US economy.
Investors flocked to Berkshire stock in 2022, sending its stock price up about 3% even as the S&P 500 slumped 19% and the Nasdaq tumbled by one-third.
Buffett’s company is widely viewed as a safe bet because it’s cash-rich, profitable, hugely diversified, and managed conservatively. Moreover, Buffett has made some of his most lucrative investments during past market downturns and economic crises.
While Buffett is the only top-10 billionaire in the red this year, he’s still ranked fifth in the index. That’s partly because Gautam Adani’s fortune has shrunk by $36 billion to $86 billion, pushing the Indian industrialist down to number 11 in the rankings. Adani Group’s stock price has plunged in recent days after short-seller Hindenburg Research released an incendiary report on the company.
