Warren Buffett Shows Why He’s Still the King of Investing



Berkshire Hathaway’s losses in Q4 2018

In the previous part of this series, we looked at Berkshire Hathaway’s (BRK-B) huge losses of over $25 billion in the fourth quarter of 2018. Many of his company’s holdings fell sharply in the fourth quarter of 2018. His firm’s holdings Apple (AAPL), Kraft Heinz (KHC), Moody’s (MCO), Teva Pharmaceutical (TEVA), Goldman Sachs (GS), JPMorgan Chase (JPM), Bank of America (BAC), and American Express (AXP) fell 30.1%, 21.9%, 16.2%, 28.4%, 25.5%, 13.5%, 16.4%, and 10.5%, respectively, in the December 2018 quarter. In the fourth quarter of 2018, Amazon.com (AMZN), Microsoft (MSFT), and NVIDIA (NVDA) also fell sharply by 25.0%, 11.2%, and 52.5%, respectively.

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Buffett is still the king of investing

In its much-awaited annual shareholders’ letter, which was released on February 23, Berkshire Hathaway showcased why Warren Buffett is still the king of investing. On the first page of the annual shareholders’ letter, Buffett’s investment firm told its investors that its compounded annual gain between 1965 to 2018 has been 18.7% as compared to the S&P 500 Index’s (SPY) only 9.7% during the same period.

This compounded annual gain was calculated based on Berkshire’s book value per share. At the same time, based on the investment firm’s market value per share, Berkshire’s compounded annual gain between 1965 and 2018 was 20.5%.

While Warren Buffett might have faced a few setbacks with his investments in the last few quarters, his long-term and value investing approach remain relevant.

Continue to the next part where we’ll find out how Warren Buffett indirectly targeted Trump in Berkshire’s annual shareholder’s letter.


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