Berkshire Hathaway Inc. (BRK.B) Has Few Investment Options That Move The Needle

Speaking on “In The Loop,” Bloomberg’s Noah Buhayar discussed about the impact of a strong U.S. economy on Warren Buffett’s Berkshire Hathaway Inc. (NYSE:BRK.B). The company has about $50 billion in cash that is available for investment, but it seems as though Buffett cannot find a good place to park the money. For the record, the company reported 41 percent gain in profit to $6.4 billion in the second quarter.

hedge fund research

Speaking about Buffett’s areas of investment, Buhayar said Berkshire Hathaway Inc. (NYSE:BRK.B) has a foothold in consumer, industrial and utility companies. He also said that most of the companies he purchased over the past 15 years have had an incredible impact on the U.S. economy.

“[...] He has got a paint company, a brick company, a carpet company that all reflects the housing market; he has got BNSF, which is one of the country’s biggest railroads, and he has got a bunch of electric utilities and manufacturing companies that really are exposed to the U.S. economy,” said Buhayar.

In as much as Buffett is a brave investor, he has often avoided certain sectors, especially those that he doesn’t understand. Therefore, according to Buhayar, technology is one sector that is not popular with Berkshire Hathaway Inc. (NYSE:BRK.B). However, Buffett has a large stock holding in International Business Machines Corp. (NYSE:IBM).

“He always says that he likes to invest in companies that he can understand, and he doesn’t understand tech, so he has generally avoided that,” noted Buhayar concerning areas that Buffett appears to have limited interest.

Concerning the $50 billion in cash that appear to be lying idle at Berkshire Hathaway Inc. (NYSE:BRK.B), Buhayar said Buffett faces a serious challenge about where to put the money for good returns the kind that he is used to from the past investments.

“[...] This is one of the big challenges and Buffett has been very transparent about it. He said as Berkshire gets bigger it just gets harder for him to deploy all of this cash that these businesses are spinning off at the same rate of that he got earlier in his career. So when Buffett is sitting on $55 billion in cash, which is what he has now, is just that the number of companies out there that can really move the needle if you went out and bought them is relatively small, so what you are seeing is a bunch of businesses spinning of funds, but he has to wait to figure out,” Buhayar observed.

Disclosure: none

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!