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joined discussion08/22/2022 14:13

Little recession? Warren Buffett Ignores Global Fears, Raises Berkshire Hathaway Bets on US Companies

Despite having slowed the pace of purchases during the second quarter of 2022, buying $6.2 billion in shares in the period — up from $51.1 billion in acquisitions in the previous quarter — the Oracle of Omaha gave new vows of faith in the US economy.
Little recession? Warren Buffett Ignores Global Fears, Raises Berkshire Hathaway Bets on US Companies
What analysts say
For economist and partner at BRA, João Beck, the recession in the United States is priced in — and financial market operators, such as Warren Buffett, have already learned to deal with the situation.

The recession is already priced in. The fall in US stock markets is already pricing in a recession and maybe even worse, due to risk aversion,” Beck said in an interview with Seu Dinheiro.

Thus, the economist believes that Warren Buffett has a long-term investment vision, which aims to return between a decade and 20 years.

Warren Buffett’s Investments
Beck highlights the sectors in which Berkshire Hathaway invested during the second quarter. Starting with the purchase of new shares in Chevron $Chevron(CVX.US)$ and Occidental Petroleum $Occidental Petroleum(OXY.US)$ .

According to the expert, the two oil companies are “in a timing very favorable, due to very high oil prices”.

In an interview with Seu Dinheiro, Beck explains that the increase in oil prices is not just related to the war in Ukraine, but to a context of supply problems ahead – which should boost prices for a few more years.

In second place comes Buffett’s allocation to the financial sector, with emphasis on a new bet on Ally Financial $Ally Financial(ALLY.US)$ , which should benefit from the higher interest rate scenario.

Buffett Confident With Berkshire
Finally, the economist highlights the share buyback of Berkshire Hathaway,

“He [Warren Buffett] used more cash to buy Berkshire’s own shares. In other words, it is as if he was increasing his position in all the shares that make up the holding company.”

In the view of João Beck, the operation is a sign that, in the view of the Oracle of Omaha, the portfolio of shares that make up Berkshire “is very cheap in relation to its forecast of future balance sheets”.

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  • whqqq : He is always like this. He makes a bet when the market is afraid. After all, the recession will pass, and he will hold his stocks till that day.Laugh