RIP Mr Goxx. 🐹 The crypto-trading Hamster that almost upstaged Warren Buffett didn’t live long enough to witness the fall of crypto, but at aged 92, Buffett is still showing why he is one of the greatest investors of all time.
After patiently sitting on the sidelines during the investing fever-pitch of 2021, Buffett’s put on an absolute masterclass on long-term investing. Berkshire Hathaway (BRK.A, BRK.B) shares are up 5% so far in 2022, significantly ahead of the -16% fall of the S&P 500 Vanguard ETF (VOO). How did Buffett bend Berkshire so well? ⚽ By doing what Buffett does best! Biding his time and pouncing on companies he can hold for years or decades to come.
Despite a little moaning about a lack of good investments earlier this year and spending tens of billions of dollars on Berkshire’s own shares, Berkshire Hathaway built up a monstrous US$146.7 billion cash pile by the start of 2022. 💰 Then, as share markets took a dive, Buffett went shopping with a vengeance. Berkshire’s 2022 shopping spree saw the company spend US$66 billion in the first nine months of 2022. Half of that was spent on energy companies, building a 20% stake in Occidental Petroleum (OXY) and a big investment in Chevron (CVX).
Buffett also slide-tackled into tech with Taiwan Semiconductor Manufacturing (TSM), computing icon HP (HPQ) and Top Gun producer Paramount Global (PARA). Meanwhile, Berkshire put the stock buybacks on the bench for the first three quarters of 2022, spending just $5.25 billion.
If Berkshire's positive performance can hold through December, it will likely help to keep up Buffett’s track record of compounding returns at almost double the return of the S&P 500 (including dividends) over the last 57 years. So much for being washed up! 👴