Warren Buffett doesn’t have psychic powers, and his investing strategy isn’t immune to market moves. Berkshire Hathaway’s portfolio of public blue-chip securities had fallen in value by roughly $80 billion in nominal terms by mid March, compared with the $248 billion in value listed for year-end 2019 when Buffett delivered its annual results in February.
A holding in Apple stock that was worth almost $80 billion at the recent market peak had declined by around a quarter, while investments in Bank of America and other financial firms including JPMorgan and Goldman Sachs were down sharply. Berkshire Hathaway also owns stock in US airlines such as American and United that may need state assistance, which could wipe out much of their value for shareholders.
But Buffett has always been a buy-and-hold investor, and in his recent investor letter he stressed both his long-term commitment to US stocks and the amount of money he has ready to deploy.
The 'float' from Berkshire Hathaway’s insurance operations is a proxy for the cash that Buffett can spend and stood at $129 billion at the end of 2019.
Even before the recent erosion in global share prices – and a potential opportunity for long-term gains – anticipation had been growing that Buffett would like to make a last big deal before a possible shift to concentrating on succession planning.
