How Warren Buffett invests in 2022 and what he will do against inflation

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Warren Buffett Berkshire Hathaway

  • Warren Buffett and his deputies Ted Weschler and Todd Combs took advantage of the drop in Apple shares to buy more shares in the Cupertino firm.
  • Berkshire Hathaway also entered the US technology company HP for the first time.
  • It sold all Wells Fargo shares and made a big bet on Citigroup after a change in the strategy of the world’s largest bank.

The American businessman considered one of the greatest investors in the world, Warren Buffett, went on the market in the first three months of the year.

Specifically, his company, Berkshire Hathaway, invested 41.5 billion dollars in 15 companies, of which 8 are new to his portfolio. This is Buffett’s biggest investment in the first one-year quarter since 2008.

“Be ambitious when the rest of the people are fearful.” Warren Buffet

This is one of the most emblematic phrases of the American businessman, and he seems to have carried it out with the strong purchases made at the beginning of the year.

The crashes in the stock market and the most uncontrolled inflation in 40 years were two factors that have surely had an impact on the measures decided by the so-called “Oracle of Omaha”. Last year he sold a good part of his positions and, in this and in 2023, the strategy would be different.

Its investment conglomerate has allocated 3.2 billion dollars in the first three months of 2022 to its share buyback project and, in addition, acquired the Alleghany investment holding company for more than 11.6 billion dollars.

Warren Buffet invests in Apple and energy

Every trade carried out by Buffett’s holding company, Berkshire Hathaway, is often copied by the market because it always attracts investors who are dedicated to analyzing the buying and selling of their shares.

Among the most striking acquisitions, the businessman invested a large part of his resources in the energy sector in the first three months of the year, benefited by the rise in oil and natural gas prices. The idea: hedge against rising inflation in the United States (and the rest of the world).

Warren Buffett and his lieutenants Ted Weschler and Todd Combs took advantage of the drop in Apple shares to invest close to $600 million in the Tim Cook-led technology company.

Apple is by far Berkshire Hathaway’s largest current stock investment.

The conglomerate has been investing in it for 6 years, and its participation is greater than 155 billion dollars.

Specifically, the US company responsible for designing and producing electronic equipment, software and online services accounts for almost 43 percent of the portfolio, having added 0.40 percent in the first three months of 2022.

Buffett’s Other Investments

His second-largest holding of Buffett is Bank of America, which represents nearly 11.50 percent of the portfolio of the tycoon’s investment conglomerate.

American Express, meanwhile, ranks third with 7.80 percent. In this company, Berkshire Hathaway did not increase shares.

In the first three months of the year, it also increased its exposure to the oil company Chevron, the fourth largest holding in its portfolio, with 7.12 percent, and entered for the first time exceeding 900,000 shares in the multinational dedicated to the search and Occidental Petroleum oil exploitation, which represents its eighth largest participation today.

HP, Paramount and Markel

Berkshire Hathaway also entered US tech company HP Inc. for the first time, taking a more than 11 percent stake valued at $3.79 billion.

Other acquisitions to the businessman’s portfolio were the American multinational media conglomerate Paramount Global through an investment of close to 69 million shares valued at 2.6 billion dollars.

He also bought shares in technology and specialty materials company Celanese, where he bought $1.13 billion worth of paper.

In addition, it acquired another 900 million in the pharmaceutical company Mckesson Corp., the holding company for insurance operations Markel Corp. and the banking group Ally Financial.

Berkshire Hathaway increased in the first three months of 2022 stakes in the video game company Activision Blizzard (recently acquired by Microsoft).

It also bought exposure to automaker General Motors, luxury home furnishings company RH, Formula One Management and Floor & Decor Holdings.

What shares did Berkshire Hathaway sell?

Regarding the withdrawn investments, the sale of his stake in the financial services company Wells Fargo stands out, where he had been for more than three decades and which was the largest investment of the tycoon’s conglomerate.

This historical investment that Buffett was disarmed and closed in favor of Citigroup, where he invested more than 3 billion dollars, almost 3 percent of the bank’s capital.

The entry into the largest financial services company in the world coincides with the change in the direction of Citigroup and its new strategic project focused on the management of greater assets and in the area of ​​investment banking.

In parallel, Berkshire Hathaway does not take its foot off other banks: its portfolio holds stakes in Bank of America and US Bancorp.

Buffett also divested 99 percent of his stake in US mobile phone operator Verizon Wireless, and exited biopharmaceutical AbbVie and pharmaceutical company BMS.

It also cut its holdings in the supermarket company Kroger, according to a report filed by the United States Securities and Exchange Commission (SEC).

Warren Buffett’s investment strategy

At the beginning of May, Buffett said the last time he was before the Berkshire Hathaway shareholders’ meeting that he does not believe that there is “a single and punctual instrument capable of being effective in an inflationary scenario such as the current one.”

According to the tycoon, the ability, unlike a specific strategy, in the method that those who seek to invest in times of crisis and inflation should use.

“If you have a skill that’s in high demand, it’s going to continue to be in demand beyond the dollar price,” he said.

This investment strategy beyond the problems with the war, with the pandemic and with inflation, is the advice that Buffett gave in 2010, when he was coming out of the 2008/2009 crisis and the problems with the mortgage bubble. . At the time, he said, “The best thing a person can do is invest in themselves.”

Buffet is almost 92 years old (turns in August 2022), but remains in excellent condition. So much so that at the meeting with the shareholders he was with them for more than four hours answering questions.

Buffet is almost 92 years old (turns in August 2022), but remains in excellent condition.

He was joined by Group Vice Presidents Charlie Munger, Greg Abel and Ajit Jain.

Abel will be the chairman of Berkshire Hathaway the day Buffet can no longer continue.

To talk about inflation, “the oracle of Omaha” compared the current reality with Coca-Cola. He said people will still be looking to buy their favorite soda now and decades from now, and rising prices aren’t going to play a role in that decision.

“It’s not important what happens at the price level, because people are going to continue to pay for the products they want and enjoy,” Buffett said.

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