Buffett talks about buying new shares

Warren Buffett's Berkshire Hathaway has decided to spend some of its accumulated cash holdings on a large-scale purchase of securities of other companies. The billionaire spoke about new investments at a meeting of shareholders.

The deals in the first quarter of 2022 cost Berkshire Hathaway $41 billion, according to Bloomberg. It follows from the report that the holding has increased investments in Chevron. A stake in the energy company was in the top 4 positions in Buffett's portfolio.

In addition, Berkshire Hathaway increased its stake in Activision Blizzard. He now owns a 9.5% stake in the gaming giant. Thus, Bloomberg notes, Buffett expects to make money on a deal with Microsoft - at the beginning of the year it became known about her plans to acquire Activision Blizzard for $95 per share.

The surge of Buffett's interest in buying common shares caused a number of questions from the holding's shareholders. The meeting was traditionally held in his hometown of Omaha (Nebraska) and was the first in person since 2019. Berkshire vice chairman and longtime Buffett partner Charlie Munger, also attending the event, answered questions about the markets, nuclear weapons and even bitcoin.

• Last year, Warren Buffett announced that he would be replaced as CEO of Berkshire Hathaway by one of the company's youngest directors, Greg Abel. However, there are no signs that Buffett, 91, and Munger, 98, are going to leave their leadership positions anytime soon, despite stepping back from a number of duties.
• Berkshire Hathaway's first-quarter net income fell to $5.46 billion, nearly doubling its $11.71 billion in the same period last year. Operating income rose slightly, from $7.02 billion to $7.04 billion.

What you need to know

A lot of the complexity is associated with the search for new ideas, Buffett admitted at a shareholder meeting. Any conglomerate deal now needs to be "impressive size," the investor said.

In recent years, Buffett and his deputies have been trying to funnel some of their accumulated cash reserves into attractive, high-yield assets amid fierce competition and record stock markets. Amid a general decline in the first quarter of 2022, Berkshire Hathaway sharply increased its investment activity - in particular, it continued to buy shares in the oil giant Occidental Petroleum and concluded the largest deal since 2016 to acquire Alleghany insurance corporation for $ 11.6 billion.

According to the results of the first quarter of the transaction, the amount of cash "cushion" in Berkshire's accounts was reduced to $106 billion. This is the lowest value since the third quarter of 2018. Cash volume has previously reached record highs for several quarters in a row.

As investment activity increased, the company slowed down the pace of share repurchases. The volume of buyback in the first quarter of 2022 was only $3.2 billion compared to $6.9 billion in the fourth quarter of 2021.