Warren Buffett Takes a Hit as Apple Shares Plummet
The Berkshire Hathaway Group, led by legendary investor Warren Buffett, is in the red after Apple's share price took a tumble. In Q3, Buffett's conglomerate suffered a staggering $12.77 billion loss, almost four times higher than the previous year. The decline in Apple's share price and the resulting depreciation of other Berkshire Hathaway's shareholdings contributed to a $23.5 billion book loss for the group.
Despite these setbacks, Berkshire Hathaway's operating profit soared by 41% to a hefty $10.76 billion. The car insurer Geico reported fewer accident claims, and the reinsurance business benefited from a hurricane season with fewer claims, driving up profits.
Buffet, known for his focus on a company's operating results, always advises investors to do the same. The 92-year-old investor is the world's sixth richest person, worth over $117 billion, and Berkshire Hathaway's reputation for shrewd investment decisions and broad sector coverage is unmatched.
Jazwares, the toy manufacturer Berkshire Hathaway acquired last year and famous for its Squishmallows plush toys, also reported a profit. On the other hand, BNSF, the freight railroad, saw a decline in profits due to reduced demand for consumer goods transportation.
Buffett, renowned for his investment decisions and being one of the world's wealthiest individuals, saw his wealth take a hit due to Apple's share price drop. However, this setback did not deter him from emphasizing the importance of a company's operating results, as evidenced by Berkshire Hathaway's profitable entities.
While Apple's share price decline did not lead to a direct net loss for Buffett or Berkshire Hathaway in Q3, it facilitated their strategic sale of Apple shares and the subsequent increase in their cash reserves to an all-time high of over $325 billion. Buffett, known for his cautious approach to the stock market, sold 100 million Apple shares and has been net selling stocks for eight consecutive quarters to prepare for potential market downturns.
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