The world is changing along with Warren Buffett’s track record. The legendary investor and chief executive officer of Berkshire Hathaway posted his worst year in a decade.
Buffett, an outspoken crypto critic who once derided cryptocurrency as “rat poison squared” and described investors as “delusional” missed out on the best-performing asset of the decade: Bitcoin. In 2019, BTC surged 93%, from $3,744 to $7,257 – although it remains well below its all-time high of nearly $20,000.
Berkshire Hathaway’s performance lagged in 2019. While its stock price gained 11%, it trailed behind the S&P 500’s 29% increase, ending the year with its worst figures in a decade. Even with a strong performance from Apple (AAPL) stock, its largest holding, Berkshire’s returns remained lackluster.
With $700 billion in assets, Berkshire’s cash pile has now swelled to $126 billion – and investors are anticipating Buffett’s next move to drive profits.
His last major acquisition, however, was in 2016 when he offered $32 billion to purchase Precision Castparts, an American industrial goods and metal fabrication company for the aerospace and defense industries.
In his February 2019 annual shareholder letter, Buffett writes,
“In the years ahead, we hope to move much of our excess liquidity into businesses that Berkshire will permanently own. The immediate prospects for that, however, are not good: Prices are sky-high for businesses possessing decent long-term prospects.
That disappointing reality means that 2019 will likely see us again expanding our holdings of marketable equities. We continue, nevertheless, to hope for an elephant-sized acquisition. Even at our ages of 88 and 95 – I’m the young one – that prospect is what causes my heart and [vice chairman Charlie Munger] Charlie’s to beat faster. (Just writing about the possibility of a huge purchase has caused my pulse rate to soar.)”
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