Page 36 - Investment Advisor April/May 2022

Conclusions

PORTFOLIO PERSPECTIVES
By Janet Levaux

Warren Buffett’s 8 Nuggets of Wisdom for

Investors: 2022

The conglomerate has produced compounded yearly gains that are nearly
double those of the S&P 500.

1. THE VALUE OF INFRASTRUCTURE
HOLDINGS
While many may view the Berkshire
Hathaway as a “large and somewhat
strange collection of financial assets,”
Buffett says this perception is off base.
Overall, he states, the company “owns
and operates more U.S.-based infrastruc-
ture assets … [than] any other American
corporation.”
As of Dec. 31, 2021, these U.S. infra-
structure assets were given a value of
$158 billion on Berkshire’s balance sheet.
n his yearly letter to Berkshire collection of businesses includes some This figure rose last year and should
Hathaway’s shareholders, Chair- enterprises that have truly extraordi- keep increasing, according to Buffett.
Iman Warren Buffett reviewed the nary economics, many others that enjoy “Berkshire always will be build-
variety of businesses owned by the $700 good economic characteristics, and a ing,” the Oracle of Omaha stated, not-
billion conglomerate. few that are marginal.” ing that these assets are classified on
“Whatever our form of ownership, Buffett noted that he and Munger Berkshire’s balance sheet as property,
our goal is to have meaningful invest- found few exciting investments in 2021. plant and equipment.
ments in businesses with both durable Thus, the firm spent $27.1 billion on buy-
economic advantages and a first-class backs last year, which was acceptable to 2. THE VALUE OF BEING U.S.-BASED
CEO,” he explained. This approach is some Berkshire investors. In 2021, Berkshire paid $3.3 billion on
centered on expectations of long-term “They’re still at what we think to be total U.S. corporate income-tax receipts
business performance “and not because such a comfortable discount in valua- of $402 billion. The firm also pays “sub-
we view them as vehicles for timely tion from intrinsic value per share that stantial state and foreign taxes.”
market moves.” we still believe every penny spent is Overall, Buffett noted, “Berkshire’s
He and business partner Charles accretive to the remaining sharehold- history vividly illustrates the invis-
Munger “are not stock-pickers; we are ers,” Tom Russo of the investment firm ible and often unrecognized financial
business-pickers,” Buffett said. Gardner Russo & Quinn said in an inter- partnership between government and
And they aren’t perfect. “I make view with Bloomberg. American businesses.”
many mistakes,” the Oracle of Omaha Here are eight interesting nuggets Today, the company pays some $9
admitted. “Consequently, our extensive from Buffett’s annual shareholder letter: million a day to the Treasury.

34 INVESTMENT ADVISOR APRIL/MAY 2022 | ThinkAdvisor.com