But what is Warren Buffett doing. In fact, the most famous investor in the United States used to say that he looked forward to crises. “I then feel like a sex addict in a harem”, he recounted in 1973. This is why his millions of faithful who, across the country, seek his advice and rush to his books, eagerly awaited the publication of his annual letter to shareholders to drink his hard-hitting analyzes. and its shocking aphorisms as the world goes through one of the most serious economic crises of the last hundred years.
They will be disappointed. We have to believe that at the age of 90, the “obsessed” man and his lifelong friend Charlie Munger, 97, have lost their legendary libido. No great movement in prospect, an avalanche of careful words, a few regrets and a lot of memories. Not a word about the pandemic and the turbulence that accompanies it. To believe that the most listened to investor in America, the one called “the Oracle of Omaha”, in reference to his lost city of Nebraska, has no idea. This world of low interest rates, stock market madness, revolt by small shareholders no longer suits him.
So, like all bosses short of ideas, he returns the money to the shareholders. In 2020, his company, Berkshire Hathaway, repurchased shares of his own company for $ 25 billion (€ 20.7 billion). There was a time, however, when Buffett castigated those unimaginative CEOs who bought back their shares rather than invest.
Big, heavy and durable
He saw the interest of this practice with his stake of more than 5% in Apple, the largest line in his portfolio. He sold part of it for 11 billion, but the regular practice of repurchasing shares by Apple mechanically increased its share in the Californian company, beyond the original 5%. And then, this practice does not undermine its cash flow, which still reaches 138 billion dollars, completely liquid, can be mobilized quickly if necessary.
This is how the life of the markets goes today. For the shareholders, the coffers are full, the assets very expensive and the rates very low. This encourages taking more risks, in companies that are more daring or in difficulty. Hence the madness that currently surrounds IPOs. But adventure is not Warren Buffett’s specialty. He advises against the debt market, either dangerous or unprofitable. “Investing in risky loans is not the answer to inadequate rates”, he said.
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