Berkshire Hathaway loses $44 billion this quarter

Berkshire Hathaway loses $44 billion this quarter

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Berkshire Hathaway, the holding company of Warren Buffett, dubbed the “Oracle of Omaha,” saw its assets plummet $44 billion as the stock market crashed. In the first quarter of 2020, it recorded a depreciation of $50 billion due to the health crisis.

An economic and investment crisis

Berkshire Hathaway is owned by famed investor Warren Buffett. The holding suffered a loss of 44 billion dollars in the second quarter, due to the fall of its shares on the stock market. The NYSE hasn’t had such a poor first half since 1970, and it’s not the first time Berkshire Hathaway has lost such a huge amount of money. The last time this happened was in the first quarter of 2020, at the very start of the Covid pandemic and lockdowns, when Berkshire Hathaway lost nearly $50 billion.

Berkshire Hathaway owns about 50 different American companies, including trains, energy, insurance and ice cream. Despite losing $53 billion in market investments between April and June 2022, the company still posted a 39% increase in profits to $9.28 billion thanks to its operational activities.

Berkshire Hathaway posted a loss of $43.8 billion in the quarter, compared with a profit of $28 billion in the same quarter last year. In its earnings announcement, the company said the amount of profit or loss in a quarter is not significant and highlighted investment gains and losses.

In the first quarter, Berkshire Hathaway had bought more than $51 billion in shares, notably moving oil major Chevron into the top 4 of its investments alongside American Express, Apple and Bank of America.

Warren Buffett’s holding also acquired 14% of the oil company Occidental Petroleum. The company has also increased its stake in the video game publisher Activision (which is to be acquired by Microsoft), the manufacturer of computers and printers HP. Additionally, the company planned to buy Alleghany Insurance Company for $11.6 billion.

Berkshire Hathaway: a good indicator of economic health

Warren Buffet, who turns 92 this month, is known as the Oracle of Omaha, named after his hometown in Nebraska. A Canadian named Greg Abel has been chosen to take over Berkshire Hathaway from Buffett, who will step down as CEO but remain on the board.

Berkshire Hathaway has invested in dozens of different companies and as such generally shows trends in the general economy. Investors are paying close attention to the company because of this.

Berkshire Hathaway began as a small textile company called the merger of Berkshire Fine Spinning Associates and Hathaway Manufacturing Company in 1950.
In 1962, Warren Buffett, an American investor, acquired all the shares of this company, starting with a purchase price of 7.5 USD per share. He had been interested in the business since then and gradually got rid of the textile business before turning the business into a private equity fund in 1969. The business name was changed to Berkshire Hathaway in 2008 and its title reached $140,000.

Buffett announced in June 2006 that he would donate his entire fortune to charity. 85% of the money donated would go to the Bill and Melinda Gates Foundation, while the remaining 15% would go to other charities. The donation will be made by donating Berkshire Hathaway shares, approximately 10 million shares will be donated to the foundation.

Buffet believes the stock price will continue to rise over the next few years, he has donated one million shares to each of the 3 charities run by his children.

More than 62 billion dollars is the fortune of Warren Buffett, one of the richest men in the world. Every year, he tops the list of the world’s greatest billionaires.

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