Finimize - 💪 Can anyone stop Warren Buffett?

Hi Reader, here's what you need to know for March 1st in 3:07 minutes.

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Today's big stories

Warren Buffett’s Berkshire Hathaway reported record earnings
Goldman Sachs has laid out one long-term opportunity that could emerge from rising interest rates – Read Now
Swedish startup Klarna saw strong growth – and big losses – last year

Wordles Of Wisdom

What’s Going On Here?

Berkshire Hathaway posted record earnings over the weekend, because Warren Buffett always seems to have the right answer.

What Does This Mean?

The world economy was finally getting back on its feet last year, and conglomerate Berkshire Hathaway just sat back and reaped the rewards. The firm’s railroad business really, ahem… picked up steam, reporting a record profit as companies got back to moving goods around the world. That helped bring Berkshire’s operating profit up 25% to a record-breaking $27 billion in 2021. The firm’s investments soared last year too, including a $41 billion gain just from its Apple shares. Put all together, and Berkshire’s net income more than doubled to reach a record $90 billion. That’s a lot of records.

Why Should I Care?

The bigger picture: Berkshire has cash to spare.
All this, and Berkshire hasn’t even struck any big deals in the last six years. That’s mainly because Berkshire CEO Warren Buffett has been deterred by sky-high stock valuations, which he puts down to two years of cheap money fueled by low interest rates. Instead, the company’s been buying its own shares, including a – yep – record $27 billion worth last year. Even that’s barely made a dent in its cash pile: the company ended 2021 with $147 billion in the bank.

For markets: Stick with stocks.
Buffett also had some thoughts to share with investors in light of last month’s events. The Oracle of Omaha reckons the best way to build wealth in the long term is to invest in stocks, and warned against dumping them – as well as against hoarding cash and buying gold or bitcoin – in times of conflict (tweet this). See, Buffett reckons the value of money will only go down during wartime, whereas stocks – which represent actual businesses – should eventually start growing again. In short, he sees this conflict-induced dip as a prime buying opportunity.

You might also like: Where Buffett’s investing his money – and where you could too.

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Analyst Take

The Long-Term Opportunity From Britain’s Rising Interest Rates

Carl Hazeley, Analyst

What’s Going On Here?

It’s hard not to get caught up in talk of the short term right now.

Most investors are, after all, fixated on the Russia-Ukraine crisis, which is having an immediate and very tangible impact on their portfolios.

But this could serve as the reminder you need to take positions that’ll bolster your portfolio for the next five to ten years.

And investment Goldman Sachs has exactly that: an opportunity tied up with UK interest rates whose upside potential won’t be realized for a few years yet.

So that’s today’s Insight: the long-term opportunity emerging from Britain’s rising interest rates.

Read or listen to the Insight here

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