Warren Buffett is currently on a shopping spree. At least the Oracle of Omaha has used the last few weeks and sometimes days for some purchases. For example, the acquisition of assets from Dominion Energy. Furthermore, the Bank of America on his purchase list.
If we buy back the shares from Berkshire Hathaway (WKN: A0YJQ2), the Omaha Pi oracle spent about $ 10 billion on purchases. A really remarkable sum. Given the $ 137 billion in cash, though, it’s more of a peanut.
This in turn leads to a slightly different question. When would the Omaha Oracle use up his mountain of cash if he continued to invest so heavily? The answer: in about 41 weeks, if Buffett at Berkshire Hathaway would now invest about $ 10 billion every three weeks. That corresponds roughly to the period up to May next year. However, the answer to this question naturally depends on more than the mere sums and calculation examples.
Will there be other opportunities?
In particular, the question of whether Warren Buffett will find additional opportunities for acquisitions or acquisitions should be crucial in this context. Buying Dominion Energy’s infrastructure could have been a stroke of luck. After all, not every energy company wants to part with its infrastructure now.
If we take a look at the rest of the purchases, you will notice: Apart from Berkshire Hathaway, the current buying situation is generally rather calm. The bottom line was that the oracle only bought Bank of America shares for $ 1.2 billion. That is and remains comparatively little for the stock guru Buffett.
There could therefore be some indications that the last three weeks should not be seen as representative. Especially since Buffett and Berkshire Hathaway don’t know a fixed time frame until when they want to have their cash mountain used up. This should never fall to zero anyway: After all, Buffett always likes to hold about $ 20 billion or a little more in cash. Nevertheless, the mind game is remarkable. Because it shows that Buffett could continue to use the coming nine months for high purchases of around $ 3.3 billion a week.
And what about share buybacks …?
The attentive investor noticed with certainty that I largely ignored share buybacks. Certainly, Buffett bought and retired treasury shares for approximately $ 1.6 billion in the first quarter. For the past few weeks and months, it has also been around $ 5 billion. That is certainly not a little and should not fall over the back.
However, since Berkshire Hathaway receives a large amount of fresh capital in the form of dividends day after day, week after week and month after month, I simply ignored that. The share buybacks could eventually compensate for this dilutive effect of the dividends.
But, yes, no question: stock buybacks can and should be considered as a business-oriented investor at Berkshire Hathaway. The part that everyone holds in the legendary investment company is consequently consequently larger.
Exciting numbers …!
However, the current figures and calculation examples show that Warren Buffett does not have to end his purchases. However, the chances and opportunities remain decisive when and in what style the Omaha oracle strikes. In any case, we have insightful weeks ahead. For now, Buffett has used at least part of his cash mountain lately.
The post $ 10 billion in 3 weeks: If Warren Buffett continues to invest, his cash mountain will have disappeared in May! appeared first on The Motley Fool Germany.
Vincent owns Berkshire Hathaway shares. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares) and recommends the following options: Short September 2020 $ 200 call on Berkshire Hathaway (B shares), Short January 2021 $ 200 put on Berkshire Hathaway (B shares) and Long January 2021 $ 200 call on Berkshire Hathaway (B shares). The Motley Fool recommends Dominion Energy.
Motley Fool Deutschland 2020