On February 26, Berkshire Hathaway, a subsidiary of Warren Buffett, released the fourth quarter and full year performance report of 2021. This year’s “Buffett’s letter to shareholders” was also made public.
Berkshire achieved an operating profit of US $27.455 billion in 2021 and US $21.922 billion in 2020, with a year-on-year increase of 25.24%. The net profit attributable to the parent company was US $89.795 billion, an increase of 111.18% over US $42.521 billion in the same period. In the fourth quarter of 2021, the operating profit was US $7.285 billion, an increase of 45.09% compared with us $5.021 billion in the same period. The net profit attributable to the parent company was US $39.65 billion, an increase of 10.63% over US $35.84 billion in the same period.
Buffett said in his letter that we hold stocks based on the expectation of its long-term operating performance, rather than speculating on the short-term trend of the market.
Chen Li, chief economist of Chuancai securities and director of the Research Institute, told the reporter of Securities Daily that the investment way of “stock god” depends on the strong analytical ability of investment research, especially the mining ability of bottom companies. Second, the holding cycle of some stocks is very long, and they can patiently and fully enjoy the extremely high dividends of the company from the initial stage to unicorn.
Yang Delong, chief economist of Qianhai open source fund, said in an interview with the Securities Daily that from 1965 to 2021, the compound annual growth rate of Berkshire Hathaway’s market value per share was 20.1%, significantly exceeding the 10.5% of the S & P 500 index. Due to the power of compound interest, Berkshire Hathaway’s market value growth rate is an amazing 36416 times, while the S & P 500 index is 302 times, that is to say, Berkshire Hathaway’s market value growth has outperformed the S & P 500 index by more than 100 times in the past 50 years, which fully reflects the charm of value investment.
In terms of shareholding, by the end of 2021, Berkshire Hathaway had held apple (market value of US $161155 billion), Bank of America (market value of US $45.952 billion), American Express (market value of US $24.804 billion), Coca Cola (market value of US $23.684 billion), moody’s (market value of US $9.636 billion), Verizon (market value of US $8.253 billion), United Bank of America (market value of US $8.058 billion) Byd Company Limited(002594) (market value: USD 7.693 billion), Chevron (market value: USD 4.488 billion), Bank of New York Mellon (market value: USD 3.882 billion), etc.
Yang Delong said that the largest heavy position stock is still apple, with more than $161.1 billion, accounting for about 46% of the total stock position. It can be seen that Buffett has always maintained a habit of heavy positions for promising companies. Apple is undoubtedly the company that creates the highest profit for him, and also contributes nearly $100 billion to Berkshire Hathaway.
In addition, Byd Company Limited(002594) , the eighth largest position, has also brought huge rewards to the “stock god”. In September 2008, Buffett built a position of US $230 million at the price of HK $8 / share. According to the annual report, Buffett has made 32 times of his investment in Byd Company Limited(002594) .
Yang Delong reminded that although Berkshire Hathaway has US $350 billion in equity assets, it still has a large number of cash positions in the balance sheet, including US $144 billion in cash and cash equivalents. In other words, there are about 20% to 30% cash positions left, and there is no full allocation of equity assets.
“In terms of investment proportion, technology, finance and consumer stocks account for a relatively high proportion, and pay special attention to growth leading enterprises.” Chen Li said that the A-share market also pays special attention to value investment and technology attributes. Combined with the current market, investors can focus on the energy industry, bulk commodities and precious metals in the short term under the specific market environment.
