Warren Buffett's Berkshire Hathaway has likely plowed billions into stocks and buybacks, investor Bill Ackman predicts
- Warren Buffett's Berkshire Hathaway may have spent billions on share buybacks and other stocks during the market meltdown, hedge fund chief Bill Ackman said on the The Knowledge Project podcast.
- "I'm surprised they haven't done anything yet that's visible, but my guess is they've been buying stocks a lot," the Pershing Square Capital chief said.
- "I hope that he's purchased a lot of his own shares and I hope he's deployed capital in other companies as well," Ackman added.
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Warren Buffett has kept quiet during the coronavirus crisis, fueling speculation about what the famed investor's Berkshire Hathaway conglomerate has been doing ahead of its annual meeting this weekend.
Berkshire may have splurged on share buybacks and other stocks during the market meltdown, billionaire hedge fund manager Bill Ackman said on the latest episode of The Knowledge Project podcast.
"I'm surprised they haven't done anything yet that's visible, but my guess is they've been buying stocks a lot," the Pershing Square Capital chief told host Shane Parrish.
"The big opportunity for Berkshire is Berkshire itself," Ackman added, given it was a "cheap stock" before the downturn and is now a "real bargain" at less than $190 for a Class B share.
Buffett has repeatedly underscored the value of share buybacks over the years, arguing they benefit shareholders and sellers, are less risky than acquisitions and more efficient than dividends, and can signal that executives prioritize their shareholders' interests.
"I hope that he's purchased a lot of his own shares and I hope he's deployed capital in other companies as well," Ackman said on the podcast.
Ackman made a similar prediction in a recent Vanity Fair interview. "After he invests that $100 billion and change," he told the magazine, "he'll let everybody know."
Buffett famously capitalized on the 2008 financial crisis, throwing lucrative lifelines to Goldman Sachs, General Electric, Bank of America, and other companies.
However, his longtime partner, Charlie Munger, revealed this month that executives are "frozen" by the pandemic threat and are "not calling Warren."
Ackman isn't the only Berkshire shareholder who expects Buffett to spend big on buybacks.
"I would be surprised if they didn't repurchase at least $20 billion during the first quarter," Chris Bloomstran, head of Semper Augustus Investments, recently told Business Insider.
However, Bloomstran suggested Berkshire hasn't added much to its stock portfolio in recent weeks. "My sense is they've not been that active," he said.
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