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Survey Monday
Historically speaking, what was Warren Buffett's best investment?
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A new chapter
A big announcement shook the financial world over the weekend as investing legend Warren Buffett announced he would step down as CEO of Berkshire Hathaway (BRK.A, BRK.B). The news came in the final minute of Berkshire's annual shareholders meeting, also known as "Woodstock for Capitalists," which saw as many as 40,000 people descend on Omaha, Nebraska. While Buffett will likely stay on as chairman, the announcement was held close to his chest, with only two company directors (his children) aware of his plans. Who is Greg Abel, set to replace The Oracle at the top?
Greedy when others are fearful: Buffett took control of Berkshire Hathaway in 1965 when it was a failing textile firm with shares trading below $20. As of Friday, its Class A shares closed at a record $809,809, with a whopping market value of $1.2T (8th largest U.S. public company). Its returns over that period have also doubled the S&P 500 (SP500), notching a 19.9% compounded annual growth rate. Speculation has swirled for decades regarding life after Buffett, who embodied foresight and characteristic humility. In 2003, at just 72, he quipped that if he ever started "losing [his] marbles," it would take his entire family to convince him to step aside.
Berkshire Hathaway itself was a one-of-a-kind vehicle: neither mutual fund nor hedge fund, it offered Buffett the perfect structure to capitalize on long-term opportunities without the burden of investor redemptions or short-term performance pressures. In fact, the long-term investment and growth approach differed tremendously from the current environment of algorithmic and meme trading, where valuations and patience are virtues in contrast to speed and FOMO. Buffett was also able to take money off the table when it was warranted, with Berkshire currently sitting on a cash pile of around $347B, including around 5% of all Treasury bills in circulation. Here are the company's latest earnings
Highlights from Capitalist Woodstock: See what Buffett had to say about Berkshire's failed venture with Amazon (AMZN) and JPMorgan (JPM) to transform the U.S. healthcare system. He also discussed the insurance industry at large, including the risk of wildfires, AI applications, and how things will work in the era of self-driving cars. Additional topics covered included "American exceptionalism," his view on tariffs and trade, and whether he'd choose stocks over real estate. Take the WSB survey.
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Today's Markets
In Asia, Japan closed. Hong Kong closed. China closed. India +0.4%.
In Europe, at midday, London closed. Paris -0.7%. Frankfurt +0.6%.
Futures at 6:30, Dow -0.7%. S&P -0.8%. Nasdaq -1%. Crude -1.4% to $57.50. Gold +2.5% to $3,323.10. Bitcoin -1.2% to $94,330.
Ten-year Treasury Yield unchanged at 4.32%.
On The Calendar
Companies reporting today include Palantir (PLTR) and Ford (F).
See the full earnings calendar on Seeking Alpha, as well as today's economic calendar.
