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Warren Buffett is sure most famous investors of all time. But the Oracle of Omaha missed out on this year’s stock market rally. Until now, at least.
Buffett’s Berkshire Hathaway Shares
(BRKB) The conglomerate, a company that owns consumer brands from Geico and the Burlington Northern Santa Fe Railroad to Dairy Queen, Duracell and Fruit of the Loom, is down a bit this year — lagging the market as the S&P 500 is up 6%. (The Nasdaq did even better, rising 12%.)
Berkshire Hathaway also has a huge stock portfolio that Buffett helps run. Apple
(AAPL) By far the top holding for Berkshire, which also has a large stake in Bank of America
(BAC)Chevron
(CVX)American Express
(AXP) and Coca-Cola
(No),
So is Berkshire’s portfolio, dare we say it, a little too boring? After all, if you want exposure to the big blue chips he owns, you can just buy an S&P 500 index fund.
In fact, Buffett has promoted the idea several times to investors, arguing that most individual stock pickers will not be able to beat the market. 92-year-old Buffet whose net worth is more than $ 100 billion according to forbesHe even said he wanted the trustees in charge of his will to put 90% of his wife’s inheritance into an index fund.
Yet, investors pay close attention to Buffett every time he speaks. That’s why traders will be paying attention to every word in its annual shareholder letter, which will be issued along with Berkshire’s latest earnings report on the morning of Saturday, February 25.
Don’t expect any big surprises. Buffett will likely continue to extol the virtues of a long-term, patient approach to investing and Give a bullish outlook for the US economy, And to its credit, one that usually pays dividends: Berkshire stock. was up In the market down 3% last year.
But market watchers are watching to see what Buffett has to say about the ongoing inflation crisis that has had a major impact on consumers and investors. After all, he has gone through two periods of hyperinflation.
“I’d like to hear from Buffett about what’s happening with interest rates and inflation,” said Steve Check, chairman of Check Capital Management, an investment firm that owns Berkshire shares. “He talked a lot about how worried he was in the 1970s and 1980s.”
Buffett has made many comments about inflation over the past few decades. And he was particularly nervous in the late 1970s and early 1980s, when rising oil prices caused inflationary shocks that severely hurt the economy.
Buffett said in his, “The high rate of inflation creates a tax on capital that makes many corporate investments unwise.” 1980 shareholder letter For Berkshire Investors. Buffett describes inflation as a giant parasitic “tapeworm” for businesses in 1981,
Buffett may also need to figure out how top-heavy and concentrated His portfolio is done. Berkshire’s five largest holdings make up about 75% of the company’s stock investments.
“The portfolio is significantly overweight [in] technology, energy, consumer staples and financials relative to the S&P 500,” Bill Stone, chief investment officer at The Glenview Trust Company, another Berkshire shareholder, said in a report. Stone noted that Berkshire also has a large stake in Kraft Heinz.
(KHC) and oil company Occidental Petroleum
(oxy),
Investors also want to know what Buffett plans to do with Berkshire’s massive pile of cash. The company has over $100 billion on its balance sheet. Are there more acquisitions coming?
Buffett has talked for the past few years about how he yearns to do an “elephant-sized” deal with Berkshire’s cash. Its Most Recent Big Deal Was Last year’s purchase of the insurance company Alleghany for $11.6 billion.
Still, the recent sluggish performance of Berkshire’s stock isn’t likely to deter loyal Buffett fans, many of whom are expected to make the annual pilgrimage to Omaha on May 6 for the company’s shareholder meeting.
Berkshire Vice Chairman Charlie Munger will likely be on stage with Buffett. So does Greg Abel, chairman and CEO of Berkshire Hathaway Energy, whom Buffett handpicked finally make it As CEO of Berkshire Hathaway.
Buffett’s faith in the American economy is well founded. American consumers have proven remarkably resilient, despite hyperinflation. Surprisingly strong retail sales gains for January There is further proof of this.
Investors will get many more clues about consumer spending this week when several top retailers report earnings.
dow components walmart
(wmt) and home depot
(HD) are the main attractions. walmart
(wmt)Who has a large scale grocery business should shed some light on how buyers are coping with rising grocery prices.
However, Walmart can still benefit from its reputation as a place to find bargains. It may also attract more affluent shoppers who want to save money.
“With inflation remaining elevated in the US, we expect Walmart to continue to lose business…especially from high-income customers,” Arun Sundaram, an analyst at CFRA Research, said in a report.
And investors will be looking for clues about the health of the housing market when the Home Depot report comes out. Placer.ai, a research firm that measures foot traffic at top retailers, said in a recent report that consumers are returning to nearly pre-pandemic levels at Home Depot and rival Lowe’s — despite the housing downturn.
a reason? Current homeowners may decide to spend more on repairs if they plan to stay in their current home longer rather than sell now.
Placer.ai’s Ezra Carmel said, “However, the hot home-buying market is cooling off… a shift toward projects aimed at developing existing living space has resulted in foot traffic nearing pre-pandemic levels.” Has happened.” in a report, “It appears that projects that increase the likelihood of living in place also have the potential to drive visits.”
Investors will be keeping a close eye on several other retailers scheduled to report earnings this week, including TJX
(TJX) — along with TJ Maxx, Marshals and HomeGoods — owns online retailers eBay
(ebay)ATC
(ETSI)overstock
(OSTK)wayfair
(w) and China’s Alibaba
(Dad),
The US government is also set to release personal spending figures for January on Friday, another data point that will give a glimpse into the financial health of consumers.
monday: US stock and bond markets closed on President’s Day
Tuesday: US existing domestic sales; Eurozone and UK PMIs; Earnings from Walmart, Home Depot, Medtronic
(mdt)Floor
(FLR)molson coors
(Tap)Caesars Entertainment
(CZR)Diamondback Energy
(fung)Chesapeake Energy
(CHK)Palo Alto Networks
(pan), coinbasela-z-boy
(LZB) and Hostess Brands
(TWNK)
Wednesday: Weekly Crude Oil Inventory; earning from stellarBaidu
(launch)TJX, Garmin
(GRMN)Overstock, Wingstop
(wing)nvidia
(NVDA)eBay, Etsy and bumble
Thursday: US weekly jobless claims; US Q4 GDP (2nd estimate); eurozone inflation; Turkey Interest Rate Decision; Earning from Alibaba, Netease
(NTES)Neat Dr Pepper
(KDP)Wayfair, Newmont, Domino’s
(DPZ)Papa Johns
(PZZA)yeti
(Yeti), Nikolaowner of cnn warner bros discoveryblock
(SQ)booking holdings
(BKNG)live nation
(Lie)caravan
(CVNA)Simple
(INTU) and beyond flesh
(beyond)
Friday: US personal income and expenses; US PCE inflation data; US New Home Sales; Japan Inflation; Germany Q4 GDP; Earnings from CIBC
(cm)scrips
(SSP) and Cinemark
(CNK)
Saturday: Berkshire Hathaway Earnings and Warren Buffett Annual Shareholder Letter