For Warren Buffett, bitcoin “does not produce anything”

The oracle has spoken… The 91-year-old multi-billionaire answered questions from Berkshire Hathaway shareholders for more than five hours alongside his right-hand man Charlie Munger, 98, at the annual general meeting of the holding which was held for the first time since 2019 in person in Omaha, Nebraska. As markets have wobbled year-to-date, Berkshire has spotted opportunities and bought more than $51 billion worth of stock between January and March.

The holding company notably increased its stake in Chevron from 4.5 billion at the end of 2021 to 26 billion at the end of March, the oil major now being part of the top 4 of its investments alongside American Express, Apple and Bank of America. The company also acquired 14% of Occidental Petroleum. It has also bought since the beginning of the year 11% of the manufacturer of computers and printers HP and increased its stake in the video game publisher Activision, in the process of being acquired by Microsoft, to 9.5%. Berkshire has also planned to buy the insurance company Alleghany for 11.6 billion dollars.

Result: Berkshire’s war chest, which also sold 10 billion shares in the first quarter, fell from 147 to 106 billion dollars over the period. But investors need not worry, Mr. Buffett assured: Berskhire “will always have plenty of cash” immediately available to protect against bad weather.

Haro on the donkey that is bitcoin

He took advantage of being on the podium, where Greg Abel, his presumptive successor, and Ajit Jain were also present, to throw a few spades at Wall Street where, he believes, “they make a lot more money when people bet like in the casino only when they invest”. That Berkshire was able to buy 14% of Occidental in two weeks, for example, shows that “most major companies in the United States have become poker chips.”

As for bitcoin, “I don’t know if in five or ten years it will be worth more or less than today. But what I’m sure of is that it doesn’t modify anything, doesn’t produce anything”, he said. His sidekick Charlie Munger also made fun of bitcoin, but also of the Robinhood trading app and financial advisors. He also derided shareholders’ proposal to separate the roles of chairman of the board and chief executive of Berkshire.

“It’s as if Odysseus were returning from his victory in the Trojan War (…) and a stranger said to him: I don’t like the way you held your spear when you won that battle“.

The proposal was rejected by shareholders. All like several resolutions asking that the holding company provide more information on climate change or diversity.

While the question of their succession arises more and more in view of their page, neither Mr. Buffett nor Mr. Munger gave any indication of a possible departure.

Berkshire saw its net profit fall 53% in the first quarter to $5.5 billion. Operating profits generated by the companies the holding company owns, which range from insurance companies to trains to energy and frozen desserts, remained as a whole almost at the same level, at 7.04 billion dollars.

But the value of investments made by the holding company in the markets, which can be highly volatile from quarter to quarter, has plunged since the start of the year, resulting in a loss on paper of $1.58 billion.

Berkshire’s stock value itself has held up well, up 7% year-to-date, while the S&P 500, which represents the 500 largest Wall Street companies, lost more than 13%.

(with AFP)