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Saturday, November 14, 2020

Berkshire does a Stock Buyback

Berkshire reported share buybacks of about $9 billion, a total that exceeds any full-year amount in Berkshire's history. The Q3 repurchases were also a big jump from the $5.1 billion in Q2 2020. At the time, that was more than double the prior quarterly record of $2.2 billion in Q4 2019 and a shift from slower stock repurchases of $1.7 billion in Q1.

Berkshire loosened rules for Buffett to buy back shares in 2018. With Berkshire steadfastly cautious on M&A in recent years, investors have been clamoring for more repurchases.

But as recently as May, Buffett argued repurchases weren't more attractive than other money moves, saying the stock price had not fallen to "where it really feels way better to us than other things, including the option value of money, to step up in a big, big way."

Now, the latest buybacks cement a major reversal in Buffett's investment strategy, which previously shunned hefty repurchases. Year to date, Berkshire Hathaway has bought back $16 billion in stock.

Meanwhile, Berkshire Hathaway was a net buyer of other stocks, adding $4.8 billion to its closely watched portfolio. That followed Q2's $13 billion in stock sales, the most in more than a decade, as Buffett cashed out all his airline stocks.

With the surge in buybacks and other stock purchases, Berkshire's cash pile dipped to $145.7 billion from a record high of $146.6 billion in Q2.

Thursday, August 20, 2020

Berkshire buys shares in Barrick Gold

Berkshire announced a new  20.9 million-share stake in Barrick Gold, worth $564 million. The investment, disclosed recently, gives Berkshire a 1.18% stake in Barrick and makes it the 11th largest shareholder.

Barrick Gold Corp. CEO Mark Bristow praises the new investment from Warren Buffett's Berkshire Hathaway as a “significant step” for his gold mining company and the industry. "It's the ultimate privilege to have Berkshire Hathaway as an investor in one's company and something that I've been aspiring to,” Bristow told FOX Business exclusively. “We hope it’s not the end.”

Barrick Gold shares has gained around 62% this year.

In 2005, Buffett complained gold was “something that gets dug out of the ground in Africa“ and has “no utility.”

Munger once famously said “civilized people don’t buy” gold.

While Buffett's team didn't disclose the reason for its investment, its possible the decision was made by Todd Combs or Ted Weschler, investment managers who are potential successors at Berkshire.