By
Godfrey Benjamin
April 23rd, 2024
Buffett recently talked about the “four giants” of Berkshire Hathaway, making him one of the richest people in the world. First on the list is Berkshire’s insurance business, which Buffett said will never go “obsolete.”
Warren Buffett now ranks the fifth richest person in the world with a net worth of $117 billion, according to Bloomberg Billionaires Index. This comes after making 8th place just last month with a net worth of $114 billion. His valuation put him after CEO of Tesla Inc (NASDAQ: TSLA) Elon Musk, founder of Amazon.com Inc (NASDAQ: AMZN) Jeff Bezos, CEO of LVMH Bernard Arnault, and Co-founder of Microsoft (NASDAQ: MSFT) Bill Gates. Despite the loss incurred by the first four wealthiest people in 2022, Warren Buffett’s wealth has increased by $7.8 billion. In fact, Warren Buffett, ranking fifth richest person, has thrived on the loss of other tech investors.
Buffett’s Net Worth Thrives as Other Billionaires Record Losses
Tech investors like Google co-founders Larry Page and Sergey Brin saw major losses after declaring a 20-for-1 stock split. Elon Musk, who is currently the world’s richest person, has lost $62 billion in 2022. Also, Jeff Bezos has had a $25 billion loss while Bill Gates’ net worth dropped by $ 9.5 billion between January and now.
Shares of Berkshire Hathaway (NYSE: BRK) have grown 7% since the year started due to Warren Buffett’s investment prowess in index shares. Investing directly in stocks exposes investors to any risks facing fund companies. By contrast, investing in index shares means an investor can automatically diversify, as the investment represents tens, possibly hundreds, of stocks. Coca-Cola Co (NYSE: KO), Apple Inc (NASDAQ: AAPL), Google LLC (NASDAQ: GOOG) all belong to the S&P 500, which affords the opportunity Warren Buffett needs to invest in index shares. Apple, which is down nearly 10%, makes up 44% of Berkshire Hathaway’s stock. The Oracle of Omaha has long advised other investors to mostly invest in index shares instead of investing in stock. He suggested that it is the best retirement plan. In his words:
“Consistently buy an S&P 500 low-cost index fund, keep buying it through thick and thin, and especially through thin.”
Companies that Influences Warren Buffett in Becoming World’s Fifth Richest
Buffett recently talked about the “four giants” of Berkshire Hathaway, making him one of the richest people in the world. First on the list is Berkshire’s insurance business, which Buffett said will never go “obsolete.” The successful investor believes that the sales volume of this business will generally increase along with both economic growth and inflation.
Apple Inc., which Warren Buffett first bought in Q1 of 2016, is his largest investment portfolio making up 44% of Berkshire’s stock. The investor said that Berkshire accrued $785 million in dividends from Apple Inc. At the end of last year, Berkshire Hathaway had a $157.53 billion stake in Apple Inc. with over 887 million shares.
Berkshire’s third giant is BNSF Railway Company, one of the largest freight railroads in North America. The railroad business operating income for 2021 was $8.8 billion, representing a 13.7% increase from the previous year.
Berkshire Hathaway Energy is the fourth giant. The business earned a record $4 billion in 2021. The energy company is said to have become a “utility powerhouse” under David Sokol’s and Greg Abel’s leadership. It is now a “leading force” in wind, solar, and transmission throughout the country.
Further, Warren Buffett has his biggest stock picks. These include Bank of America Corporation (NYSE: BAC), where he had a $4.2 billion stake by Q4, the Coca-Cola Company, and The Kraft Heinz Company (NASDAQ: KHC).