Buffett Blowing Up Berkshire
Great Ones, we always hear about how you should invest like Warren Buffett. The financial media calls him the “Oracle of Omaha,” and some even list Buffett as one of the greatest investors of all time.
There is some truth to Buffett’s legend. I mean, he is worth more than $100 billion … and he did make his money before the dot-com booms and the massive tech rallies of the modern age.
But I have some news for all you Buffett fanboys out there … the guy is human just like the rest of us. He makes investing mistakes … sometimes really big ones.
Proof or it didn’t happen, Mr. Great Stuff!
I got yer proof right here!
Berkshire Hathaway (NYSE: BRK.A) just posted a net Q3 loss of $2.69 billion, compared to a profit of $10.34 billion last year.
But I read that Berkshire reported a profit for Q3. What’s up with that?
This is a tale in two parts for Berkshire. The first part is operating earnings and revenue — i.e., a report on how the company itself fared during the quarter.
On the operating front, Berkshire said that earnings rose 20% to $7.76 billion. I’m not gonna lie, that’s pretty impressive considering that Berkshire’s business operations include insurance, railroads and utilities — all market sectors that have been under pressure in 2022.
Berkshire also said that it repurchased $1.05 billion in shares last quarter … so, like two BRK.A shares, right? I’m only slightly joking… BRK.A last traded at about $436,205.53 per share. So about 3,440 BRK.A shares or so.
I still don’t see how this means that Warren Buffett is a normal investor like me.
That’s because we haven’t gotten to part two yet. Geez…
So Berkshire’s regular business operations are doing just fine … heck, they grew 20% during a period where nearly every other company struggled to meet lowered expectations. So why did the company report an overall net loss?
Because of the company’s investment portfolio.
Berkshire reported an investment loss of $10.1 billion for Q3. I don’t know how much you lost during Q3, Great Ones, but I guarantee you didn’t lose that much.
What’s more, year to date, Berkshire’s investment losses have exploded to more than $63.9 billion!
So, Great Ones, do you still want to invest like Buffett?
I’m having second thoughts now, thanks.
I mean, aren’t “oracles” supposed to see stuff like this coming?
Now, I know that Warren Buffett doesn’t do most of his own investing anymore … especially at Berkshire Hathaway. He has people who do that for him, which … honestly, looking at that $63.9 billion loss this year … maybe he needs new people.
Regardless, y’all clearly don’t have $63.9 billion to lose like Buffett does. So why are y’all still trying to invest like Buffett?
Maybe, just maybe … all y’all need someone more in touch with your specific investment needs. Someone like Mike Carr.
Mike Carr is basically Wall Street’s options professor.
He teaches options trading at the New York Institute of Finance. Wall Street types — and other aspiring traders around the world — fly to him to learn how to trade the way he does.
Mike just finished recording his new Options Master Class, based on the same course he teaches on Wall Street.
And he’s charging next to nothing.
When you take this course, you’ll discover how to trade options like a true professional.
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I Have A Blue House With A Blue Window
Blue is the color of all that I wear.
Blue are the earnings and all the revenue too. I have an apron, and it is so blue…
Blue Apron (NYSE: APRN) stock though? Oh, that’s red … 14% in the red today, in fact.
In typical meal kit fashion, all the ingredients you need to put together a disastrous earnings report are in the Blue Apron box:
- Revenue rose from $109.65 million to $109.67 million, missing estimates by $4.83 million.
- Earnings came in at a loss of $0.74 per share, versus estimates for a $0.53 per-share loss.
- Customers fell 7.7%, and orders fell 12%.
- Additional funding that Blue Apron expected has been delayed.
- And finally, Blue Apron yoinked its revenue growth forecast … partly due to the points above.
But hey, at least revenue grew by $20,000, right? That’s like … a four-month subscription right there!
Seriously, that slight uptick in revenue is the only part of this Blue Apron that’s left unstained, and that’s thanks to order value increasing 13.7% last quarter.
Overall? This wouldn’t be the first time that Blue Apron delivered something less than fresh…
iSee Problems At The iFactory
Apple (Nasdaq: AAPL) just announced that it’s experiencing severe production slowdowns at its Chinese facilities due to the country’s zero-COVID policy.
When Xi Jinping says “zero-COVID” he means zero … zero movement until y’all test negative.
Anyone up for a sleepover at the Foxconn factory?
Why am I getting déjà vu?
Because if you didn’t catch it the first time Apple mentioned its production slowdown … or the time when Foxconn reported the slowdown … or the time when China’s manufacturing index showed severely weakened output … here’s your sign.
So if we just talked about this last week, why are you bringing this up again, Apple?
Are the company’s expectations dropping that fast that it warrants multiple warnings?
Let me know what you think in the inbox: GreatStuffToday@BanyanHill.com.
Lookin’ For Answers From The Great BioNTech
Please, help make this make sense…
Imagine you’re a vaccine-maker — specifically, a lil’ ol’ vaccine-maker named BioNTech (Nasdaq: BNTX). You posted bang-up earnings throughout the mid-to-late stages of the pandemic because, well, you’re a vaccine-maker.
Now … what do you do when those broad-scale immunization campaigns are over?
I mean, you don’t have the deep pockets and diverse, bestselling product lineup like Pfizer (NYSE: PFE). And as such, BioNTech is facing an earnings crisis that Pfizer was able to elude, what with it being Big Pharma and all.
BioNTech’s revenue dropped 43% last quarter, with earnings falling 44%. Yet that didn’t stop BioNTech from … hold up … raising its sales expectations? The heck?
According to company statements:
The updated guidance reflects the shipment of the Omicron adapted bivalent vaccine boosters, which started early in September and is expected to continue throughout the fourth quarter of 2022 as well as higher prices and a positive foreign currency effect.
That’s great and everything … so you’ve got new Omicron boosters? That don’t impress me much…
Why do I get the feeling that BioNTech isn’t reading the room when giving out its guidance? Usually when a company has its revenue cut almost in half, you’d think it’d be a tad more conservative, but nope: We don’t do that here.
Ouster? I Hardly … Never Mind
Alright, Great Ones, time for a homework check. Y’all did your homework from Friday, didn’t you?
You checked out the lidar tech that powers self-driving cars and maybe even added a few lidar stocks to your shortlist … right? Welp, your loss…
Today, there’s still — still — big news shaking on the self-driving street: Lidar companies are consolidating.
Oh yay! What’s that mean?
Lidar companies Ouster (NYSE: OUST) and Velodyne (Nasdaq: VLDR) will merge to form one mighty autonomous Voltron, valued at about $400 million. According to the deal, Velodyne shareholders will get 0.8204 Ouster shares for every one Velodyne share.
While the combined company remains unnamed, Ouster Founder and CEO Angus Pacala will lead it, with Velodyne CEO Ted Tewksbury manning the board. According to Pacala:
We all knew that there is a need for consolidation in the market. This is us actually going out and doing it.
Well ain’t you just the go-getting bunch? Someone had their corporate Wheaties this morning…
I said it once, and I’ll say it again … and again: Don’t wait to get in on lidar, because lidar isn’t waiting on you!
Almost every carmaker is betting on this one company to bring lidar tech into the limelight.
Audi alone is investing $16 billion … GM, $27 billion through 2025 … BMW, $35 billion.
Click here to see what all the lidar hype is about!
After you’ve gone and checked that out, let me know what you think of today’s topics in the inbox. If you ever have a stock or investing idea you’d like to see Great Stuff cover, let us know at GreatStuffToday@BanyanHill.com.
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Editor, Great Stuff