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

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

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!