Many people believe that Warren Buffet has some magic which allows him to never experience loss. But in reality, that guy is just like the rest of the traders. At the start of 2022, Warren Buffet also felt the heat as stock markets went down all over the world.
But what makes Warren Buffet special is his ability to remain undeterred even in the most chaotic market movements. Right now, Berkshire Hathaway (the company of Warren Buffet) is still investing in the markets despite the uncertain economic conditions.
Loss of $44 Billion In 2022
BRKB announced on Saturday that the net loss during the 2nd quarter was almost $44 billion, which is a major amount; no way how you look at it. However, most of the loss could be attributed to the reduction in its stock portfolio of Berkshire.
Berkshire company owns a lot of stocks in companies such as Coca-Cola, Bank of America, Apple, and American Express. Overall, these 5 companies account for 70% of the Berkshire portfolio.
This year, the companies such as Coke and Chevron made impressive rallies, but the financial and tech stocks were net losers.
Despite the steep loss, the company still reported a $9.3 operating profit which is almost 40% higher than last year.
According to experts, this gain could be traced back to good earnings in the utility, railroad, and energy businesses of Berkshire.
Berkshire Group owns MidAmerican Energy, Burlington Northern Santa Fe, Geico, and various consumer brands such as Kraft Heinz, Duracell, and Dairy Queen.
Although many businesses of Berkshire were struggling due to COVID-19, most of them have recovered already. So that's also an important factor which leads to an increase in operating margins.
If one had to define the main strategy of Berkshire, it is all about finding solid companies and then investing in them for the long run. On the other hand, many investors make the mistake of investing in short-term to medium term only, which provides mediocre results.