Contrary to popular belief, you can lose a lot of money in the stock market. Thus, on Saturday, Berkshire Hathaway, the holding company of famous investor Warren Buffett, revealed a staggering net loss of almost $44 billion in the second quarter, a consequence of the collapse in its shares in stock markets, which were very shaken during the period. Indeed, the first half of 2022 was the worst the New York Stock Exchange has seen since 1970. It is not the first time that the holding company has recorded such a loss: the stock markets collapsed in the first quarter of 2020 due to the pandemic that had cost Berkshire Hathaway almost $ 50 billion.
A portfolio of around fifty stocks
Between April and June 2022, the total investment loss in the markets is $53 billion. It couldn’t be offset by its operating income, which rose 39% over the period to $9.28 billion, thanks to insurance and railroad activities. Berkshire Hathaway’s portfolio is invested in about 50 companies, all American: from insurance companies to trains to energy and frozen desserts.
Overall, the company lost $43.8 billion in the quarter after making a profit of $28 billion a year earlier. “The level of investment gains/losses in any given quarter is generally meaningless”tempered Berkshire Hathaway in its earnings announcement.
The holding company had bought more than $51 billion worth of shares in the first quarter and, in particular, overtook oil company Chevron in its top four investments alongside American Express, Apple and Bank of America.
Greg Abel, future successor to Warren Buffett
It had also acquired 14% of Occidental Petroleum, increased its stakes in computer and printer maker HP and video game publisher Activision — which Microsoft is in the process of acquiring — and planned to buy Alleghany Insurance Company for $11.6 billion.
Canadian Greg Abel has been named to succeed Berkshire Hathaway multi-billionaire Warren Buffet with the nickname “The Oracle of Omaha” — named after his hometown in Nebraska — who will be celebrating his 92nd birthday later this month.
Investors follow Berkshire Hathaway closely because results, with its dozens of companies, generally reflect broader economic trends.