Warren Buffett Portfolio Return: How Much did Warren Buffett make in 2020?
Warren Buffett, an American investor, business tycoon, philanthropist and the CEO of Berkshire Hathaway. He is considered one of the most successful investors in the world and has a net worth of around $78.9 billion dollars, making him the world’s 7th wealthiest person. His company Berkshire Hathaway is one of the biggest companies in the world. In the year 2020, August his company’s market capitalization was $493 Billion dollars. He has a 15% stake in this company. Whatever net worth he has, it comes from his stake in Berkshire Hathaway. Apart from him, only these three are the richest in terms of net worth, Bill Gates, Jeff Besos and Bernold Arnold.
Lets now take a look at Berkshire Hathaway’s investment portfolio. Berkshire Hathaway’s investment portfolio is around $215 billion dollars, which means he has invested 16 lakh crore rupees in different countries.
Out of his total portfolio, 44% has been invested in Apple, 10.8% in Bank of America, 8.83 % in Coca Cola, 7.1% in American Express, 5.1% in Kraft Heinz, 3.3% in Moody’s corporation, 3% in Well’s Fargo, 1.03 % in JP Morgan & co. You can see here that this portfolio is a very concentrated portfolio. This isn’t a conservative portfolio. Because half of his portfolio is covered with the shares of Apple. Berkshire Hathaway invested in Apple in the year 2016. They bought the shares for around $141 per share. Currently, the share price of Apple is $462 per share. This indicates that they have got a profit share of around 227% from investing in Apple.
Warren Buffett’s Investment Portfolio:
Berkshire Hathaway’s Total Portfolio: $215 Billion Dollar
From the year 1970 till today, Berkshire Hathaway’s portfolio has yearly given a return of 18%. And because of this compounding growth, Mr Buffet’s wealth increased rapidly.
Let’s throw some more light on Berkshire Hathaway. This company was not started by Warren Buffet. The story behind this company is quite interesting. In the year 1962-63, Mr Buffet started investing in a company called Berkshire Hathaway. Gradually his investment in the company got good growth and he got a stake in the company. The management of the company wanted to buy Buffet’s stake. For this, they offered him a price of $11.5 dollar. Mr Warren Buffet accepted the offer and sold his stake.
But later when the company had sent the letter to Mr Buffet, the price which was mentioned in the letter was $11.37, and not $11.5. Then he started buying more shares of Berkshire Hathaway and got hold of the majority control in the company. His bought more than 50% stake of Berkshire Hathaway. Later, he started buying different companies through Berkshire Hathaway. The companies that Mr Buffet bought were insurance companies, retail companies, and Financial Services. All the major decisions of the company were taken by Mr Buffet and his partner.
Presently his partner is around 96 yrs old and Mr Buffet is 90 yrs old. With this growing age, it will be difficult for him to manage the whole portfolio entirely on his own. This is the reason he appointed some investment managers in the company. Ted and Tom have been appointed as the two main investors in the company by Mr Buffet. And these two mostly takes all the important decisions of the company. This company generally don’t invest in start-ups. They haven’t invested in an Indian company to date. But recently this company invested $300 dollar in Paytm. And this decision was not taken by Mr Buffet, but this was decided by his two appointed investors.
Lets now take a look at Berkshire Hathaway’s investment returns :
This company has given a return of around 12.68% in the last 10 years. In the last 5 years, they gave a return of around 10.6%. This year they gave a return of around 3%. Berkshire got a good profit with investing in Apple. Along with this, Goldman Sachs and Bank of America also got good profits. Despite all this, the annualized return of the last 10 years is quite low. Berkshire has invested in 4 Airline companies, they are American Airlines, Southwest Airlines, Delta Airlines and United Airlines. They invested around $9.3 billion dollars in these Airlines. But the entire Aviation Industry has been struggling since the past few years. The pandemic Covid-19 had only added more to the burden. They sold their shares of the Airline companies at the beginning of the month of March this year. The shares which they bought around for around $9.3 billion, they had to sell them for about $4.3 billion dollars. This had cost them a loss of $5 Billion dollars, which is roughly a loss of around 40,000 crores.
Let’s take a look at Mr Warren Buffet’s recent purchase of shares :
- He sold the shares of Goldman Sachs and earned good profit
- He sold the stake of JP Morgan & Well’s Fargo
- He sold Oxy accidental
- Also sold Philips 66
Mr Buffet is currently raising his investment in Bank of America and American Express. He also invested in a Gold mine company recently called Barrick. But this is not a huge investment.
Mr Buffet is currently avoiding any new deal right now. Berkshire Hathaway has got $137 billion dollars currently. And this cash is continuously rising. This clearly indicates that Mr Buffet is looking for the right opportunity which he failed to get in the past so many years. He got a lot of deals when 2008-2009 crisis came, like Goldman Sachs, Bank of America, Dow Chemical etc. He earned a good profit from these deals. After this, there hasn’t been a good deal which clicked so far. Mr Buffet believes that he did get into some deals in the past in haste, that’s why he had to bear losses.
Berkshire invested in a company called Precision Castparts Corp. This deal also turned out to be a loss. The company also suffered losses from Oxy Occidental and Kraft Heinz. In the year 2013, Berkshire bought a stake in Heinz. Later they also bought kraft in $50 million dollars. After this, the company started performing poorly. Mt Buffet felt, ‘We paid a lot for Kraft company, and this has been our biggest mistake. This is the reason why he is avoiding jumping into any big deals. And waiting for the right opportunity so that he can buy the shares of Good price at a reasonable price.
In the year 2010-2011, all the investments of Berkshire were looked after by Mr Buffet and his partner Charlie. The returns that Berkshire gave in the last 10 years were pretty less than the US Stock Market Index Accent. This tells us that the company has not been performing well since the last 10 years.
This was the story of the most successful investor in the world. We’ll keep bringing you the stories of more legends in the investment industry, and throw some light on their achievements, struggles and lifestyle.
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