Buybacks Pay Off for Buffett, Berkshire

Apple investment is working out, too, annual letter to shareholders says
By Bob Cronin,  Newser Staff
Posted Feb 26, 2022 3:55 PM CST
Berkshire Posts $40B Quarterly Profit: Buffett
Warren Buffett, shown in 2019, sent his annual letter to Berkshire Hathaway shareholders on Saturday.   (AP Photo/Nati Harnik, File)

(Newser) – Warren Buffett has made plenty of major acquisitions, but he told shareholders Saturday that he hasn't run across any exciting big deals lately. So he and Vice Chairman Charlie Munger have been putting Berkshire Hathaway's cash to use buying back company shares, he told shareholders in his annual letter Saturday. That's working out. Profit in the fourth quarter of last year was nearly $40 billion, CNN reports—10% higher than the same quarter the year before. For all of 2021, profit almost doubled, to nearly $90 billion.

Berkshire spent $6.9 billion on buybacks last quarter, per CNBC, making the 2021 total for repurchasing shares about $27 billion, a record. "Through that simple act, we increase your share of the many controlled and non-controlled businesses Berkshire owns," Buffett wrote in the letter. "When the price/value equation is right, this path is the easiest and most certain way for us to increase your wealth."

The stock market's climb had a lot to do with Berkshire's strong showing, too, and Buffett called out its Apple investment. Berkshire owns 5.6% of Apple, which was worth $161.2 billion at the end of 2021. That's a jump of more than $40 billion from the year before, per the Wall Street Journal. In his letter, Buffett referred to Tim Cook, Apple's CEO, as brilliant. Berkshire shareholders will have a chance to discuss all this with Buffett soon. The company announced Saturday that it will hold its first in-person annual shareholder meeting since 2019 on April 30 in Omaha and that Buffett will take questions. (Read more Warren Buffett stories.)

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