The american investor Warren Buffett, on June 14, 2016 in Washington, d.c. (Photo by YURI GRIPAS. AFP)
The iconic american investor Warren Buffett, 87-year-old attempted to reassure Saturday on the future of Berkshire Hathaway, the empire he has built, saying that the success of this conglomerate would continue after his departure.
At the traditional annual general meeting of shareholders, streamed live on the internet, in Omaha, Nebraska, his hometown, Mr. Buffett has been beset with questions about the company’s ability to survive.
He repeated several times that the success of the company, to finding bargains, to make investments turning into gold mines, to make good acquisitions was due to its balance sheet and not to the celebrity of its founder and owner.
“The reputation belongs to Berkshire now,” said Mr. Buffett. “For someone who cares (the future of his company, we (Berkshire) are the first to which he will have a phone call if needed and we will continue to be the first”, he added to the side of his “accomplice” Charlie Munger, 94 years of age.
The great names of the american economy often have the reflex to turn to the billionaire when they go wrong, as was the case of the banks Goldman Sachs (NYSE:GS) and Bank of America (NYSE:BAC) at the height of the financial crisis.
The investments of Warren Buffett are most of the time regarded by the business community as a pledge of confidence in the future of a company.
On Friday, the announcement that it had increased its stake in Apple (NASDAQ:AAPL) with a gain of nearly 4% in the Stock market action of apple.
Some wonder, therefore, if the companies would still knock at the door of Berkshire Hathaway after Warren Buffett is gone ?
“If they really care about where it is going to fail their business or the direction it will take, we are the first they call,” insisted Saturday the famous financial. “I don’t think they raccrocheront if it is not I who answers and if they need money”.
In January, Berkshire Hathaway has elevated two executives, Greg Abel and Ajit Jain, the vice-presidents, and entrusted them with more responsibility in the conduct of operations, which makes them potential successors to Mr. Buffett.
But neither of the two men had never really spoken in front of thousands of people who flocked in the state of Nebraska in the month of may each year to listen to “The oracle of Omaha,” providing its financial advice and share his point of view on the state of the u.s. economy and global growth.
– Unusual loss –
Berkshire Hathaway has stakes in a large number of companies ranging from Coca-Cola, American Express, Wells Fargo (NYSE:WFC), Delta Air Lines.
During the first quarter, the company has suffered an unusual loss of 1.14 billion dollars, according to a press release issued Saturday. In the first quarter of 2017, the income was 4.07 billion dollars.
It had to include in its accounts expenses for a total amount of 6.2 billion dollars, due to new accounting rules that require it to estimate potential losses on its large portfolio of shares, said the company.
Excluding this exceptional item, Berkshire Hathaway has reported an operating profit of $ 5.3 billion, up 49% year on year, mainly due to industrial activities -the rail company BNSF and the industry group Precision Castparts are particularly distinguished.
Other good news, the insurance subsidiary Geico, has returned to profit, reporting a profit of $ 407 million compared to an operating loss of 267 million in the same period a year ago.
She seems untouched by the natural disasters, of which the invoice had sealed his performance in 2017. The number of insurance policies sold has increased significantly, despite an increase in its rates, while compensation claims have decreased.
Berkshire Hathaway, which is seeking a big acquisition, ended the quarter with 108.6 billion dollars in her hands, a large war chest, which could allow Warren Buffett to strike a blow in the coming months.