Buffett and Berkshire Vice Chairman Charlie Munger have come under fire from some investors in recent years as tech stocks have taken the market by storm. But Buffett and Munger, 98, are convinced that owning quality large-cap U.S. companies in the consumer, financials and energy sectors is a recipe for long-term success.
Yet investment experts point out that Buffett’s penchant for buying the best companies and keeping them for a long time is what remains the key to Berkshire Hathaway’s success.
“One thing that stands out with Buffett and Munger is their ability to produce such good returns over such a long period of time,” Bill Stone, chief investment officer at The Glenview Trust Company, said in a report. “The investment industry is littered with shooting stars that have had great returns only to die out, sometimes dramatically.”
Stone is also a Berkshire shareholder and will attend the meeting.
But other experts say they want to know how Buffett and Munger feel about the market in light of the recent economic downturn and concerns that the Federal Reserve should continue to raise interest rates.
“With rates rising and inflation rising, what kind of asset allocation is appropriate? We seek that wisdom from Buffett and Munger,” said Sean Bonner, CEO of Guild, an education app. investment for the military. Bonner is a Berkshire shareholder who plans to attend the meeting for the first time.
Investors will also want to know what Berkshire plans to do with its massive cash pile, which stood at nearly $147 billion at the end of February.
Amazon and Apple add to market confusion
It’s been a volatile month for Big Tech, and the markets aren’t sure what to make of it all.
Investors’ hopes of finally removing their neck braces hinged on Apple and Amazon reporting their first-quarter results yesterday afternoon. Some cohesion between the two trillion-plus companies could shed some light on the market outlook.
But that didn’t happen.
Apple beat earnings estimates. Revenues increased by almost 9% on an annual basis, while sales increased by 19%. Earnings per share were $1.52, beating estimates of $1.43. The company announced a $90 billion share buyback and a 5% increase in the dividend.
But Apple’s prospects are not very good. Shares fell after Chief Financial Officer Luca Maestri warned Covid-related supply constraints could hurt second-quarter sales by $4 billion to $8 billion. Apple is not immune to supply chain challenges, CEO Tim Cook added.
Amazon’s revenue rose 7% in the first quarter, compared to 44% last year. That’s the company’s slowest growth rate since the dot-com breakout in 2001. Second-quarter guidance was also disappointing. Growth could slow to 3% compared to the previous year.
“The pandemic and subsequent war in Ukraine has brought about unusual growth and challenges,” Amazon CEO Andy Jassy said in a statement.
McDonald’s must abandon millions of Russian burgers
Trash cans in Russia are overflowing with bad Big Macs and moldy McNuggets.
McDonald’s lost $100 million worth of food and supplies after closing its restaurants in Russia following the country’s invasion of Ukraine. Inventory will “likely be eliminated,” the company said.
McDonald’s chose to close its 850 Russian restaurants and 108 restaurants in Ukraine due to the conflict but continued to pay its 62,000 employees and many suppliers in the region.
McDonald’s reported better-than-expected profits and revenue as it offset Russian losses with price increases in the United States and strong international growth.