Warren Buffett Continues to Invest in Berkshire Hathaway: What You Need to Know

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Warren Buffett, one of the most renowned investors in the world, has been cautious about the stock market in recent times. However, there’s one stock that he hasn’t been able to resist buying: Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B). In fact, Buffett purchased shares of Berkshire every single month in 2023, and there’s a good chance he’ll continue doing so this year.

Giving Shareholders a Bigger Stake

Buffett believes that one of the best ways to increase investors’ exposure to Berkshire’s assets is through share repurchases. By repurchasing shares on the open market, remaining shareholders own a larger stake in the company and gain more exposure to its diversified portfolio. In his 2023 letter to shareholders, Buffett explained, “Such repurchases work to increase your participation in every asset that Berkshire owns.”

While Buffett continues to buy back shares, he emphasizes that stock repurchases should be price-dependent. Berkshire amended its share repurchase policy in mid-2018, allowing Buffett to buy back shares as long as he believed the share price was below the stock’s intrinsic value.

Will Buffett Buy More in 2024?

Considering Buffett’s track record and his faith in Berkshire’s future, it’s highly likely that he will continue to purchase shares of Berkshire Hathaway in 2024. In 2023 alone, Buffett invested $9.2 billion in the company, an increase from the previous year. Berkshire’s operating income has been growing steadily, driven by the strength of its insurance business. Additionally, the company has consistently generated significant amounts of cash for its shareholders.

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With a massive cash pile, Buffett has limited options on where to invest. Acquiring new businesses or buying short-term Treasury bonds are not currently viable options. Thus, one of the best long-term uses of cash for Berkshire is to buy back shares. Until a better opportunity arises, investors should expect Buffett to continue repurchasing shares and returning cash to shareholders.

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Disclaimer: Business Today is not affiliated with The Motley Fool or any of its partners. This article is purely for informational purposes and does not constitute financial advice. Please consult with a professional advisor before making any investment decisions.