Warren Buffett strides back up the ranks of the richest men on the planet. While tech billionaires such as Tesla’s Elon Musk and Amazon.com’s Jeff Bezos are seeing their assets erode in these first months of 2022 in light of the sharp decline in tech stocks (yesterday the Nasdaq closed in Bear territory, i.e. over -20 % from maximums), 90-year-old Buffett smiles and returns to the five richest people in the world. It is the first time in the past 12 months that Buffett has returned to the top 5 after falling to 11th place during the month of October.
Since the beginning of the year, according to what emerges from the Bloomberg Billionaires Index, Buffett’s fortune has grown by 7.2% to $ 116.7 billion due to the resilience shown by his Berkshire Hathaway, one of the few giants on Wall Street that has been managing to dodge the bear market in recent months. In the same period, Tesla dropped by 32% and Amazon.com by 19.5%.
The Occidental Petroleum move
On Friday, Berkshire Hathaway revealed a purchase of nearly 30 million additional shares in Occidental Petroleum, a Houston-based oil and gas company. The deal, worth approximately $ 1.6 billion, helped reduce Berkshire’s near-record $ 146.7 billion in cash.
The tense nerves on the markets do not scare Buffett who in the past has repeatedly stressed that these situations should not lead to exiting equities and are indeed seen by him as opportunities to buy at reasonable prices.
Buffett’s investment philosophy
In March 2014, at the time of the Crimean crisis, Buffett made it clear that for no reason he would sell shares. On the contrary. “The cheaper the stocks are, the more likely they are to buy them,” he explained, adding that he wouldn’t sell even if the conflict turned into another Cold War or World War III. “The only thing to be sure of is that if we got into a war, the value of money would drop. It has happened in practically every war I know of, ”Buffett explained a few years ago. “So the last thing I would do is hold money during a war.” During the same interview, Buffett also pointed out that the US stock market grew during World War II and has always marched higher over time.
His first investment in the middle of World War II
It should not be forgotten that Buffett bought his first shares at the age of 11, in the spring of 1942, that is, during the Second World War. In the letter to shareholders for 2018, the investment guro admitted that he bought three shares of Cities Service, investing $ 115 in savings. According to his own calculations, if he had invested that amount in a commission-free S&P 500 index fund and reinvested all dividends, it would have been worth $ 607,000 by 2019, a 5,288x gain. Conversely, if he panicked and bought $ 115 worth of gold, its value would grow to just $ 4,200.