Its origins
Legend has it that he began investing his small savings at the age of 14. When he rented a small family plot of land in Nebraska to some shepherds, he obtained a constant income from it. After graduating in Economics and a master’s degree from Columbia (and not from Harvard which rejected his application, only to change his mind later) he began working in New York for the first hedge fund in history, the Graham fund, of which he refuses to become a partner when the founder retires. He returns to his native Nebraska and decides to found the Buffett Partnership, an investment fund with which he applies the investment strategies taught by Benjamin Graham, known as value investing, that is, the search for undervalued securities to buy and hold for very long periods. Through this mode, Buffett acquires stakes in giants such as Coca Cola, Gillette, McDonald’s, Kirby Company and Walt Disney. Subsequently, he decided to take the Buffett Partnership public by merging it with a listed textile company, Berkshire Hathaway.
The Warren Indicator
Over the years it has acquired such a privileged income of credibility that it has been converted into a benchmark. An indicator was even created in his name that guides investment choices on the stock market depending on how Buffett believes the wind is changing. It is an algorithm that evaluates stock market performances by linking them to the GDP of the United States, therefore identifying an industrial drop point. He was one of the few, Warren, to predict the collapse of 2008, albeit not on that scale, gradually abandoning banking stocks before the collapse of Lehman Brothers. He is known for his philanthropic activities. He significantly finances the foundation of his friend Bill Gates.
The Berkshire Hathaway shareholders’ meeting
In recent days it was the annual meeting of shareholders of Berkshire Hathaway that stole the show with a significant move. The holding company led by Warren Buffett reduced its stake in Apple by 13%, from 905 million shares at the end of 2023 to 790 million. Buffett justified this choice by highlighting how current fiscal policies could lead to an increase in corporate taxes. Despite this, the tycoon remains confident in Apple’s solidity both as a business and as an investment. The holding’s portfolio is made up from around fifty stocks, where the first four represent over 60% of the entire portfolioor. The most relevant participation is Apple followed by Bank of America, American Express, Coca Cola and Chevron. Currently the value of the holdings is equal to 336 billion dollars.
The market reaction
The market reaction was not long in coming: Apple shares fell by 0.9%, becoming the main negative contributor to the S&P 500. With a 6% weight in the index, the reduction caused a 5% negative impact on the S&P 500. «The focus will be on the «Bitten Apple», which will hold a special event where it is expected to announce new products, including iPad and hardware accessories. However, product growth appears to be struggling compared to services, remaining in the latter’s shadow.
The day opens with a slide for Palantir, whose shares trade -8% in the after-hours market. Palantir Technologies is among the main beneficiaries of the wave of spending on artificial intelligencerecording a stock market gain of more than 46% since the beginning of the year and 240% in the last 12 months, investors were expecting stellar results, especially due to doubts related to the company’s valuation”, explains Gabriel Debach, Italian market analyst at eToro.
The long-term prospects
Although Palantir reported a 21% revenue increase and 454% earnings increase over the prior year, the market reacted negatively to weaker-than-expected guidance. The disappointment highlighted how investors are looking for signs of sustainable growth and certainties about long-term prospects.
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