Both the United Kingdom and the United States have seen soaring inflation in recent months, and while price growth in the United States slowed in April, annual inflation remained close to a 40-year high. In April, the rate in the US slowed to 8.3 percent from 8.5 percent in March.
Berkshire Hathaway has spent $ 41.5 billion (approximately £ 33.8 billion) this year to increase stock purchases, according to Fidelity International.
Berkshire Hathaway, already a shareholder in the multinational oil and gas company Chevron, increased its stake from $ 4.5 billion to $ 26 billion in the first quarter of 2022.
The company also strengthened its already significant stake in Apple this year – by buying additional shares for $ 600 million (around £ 481 million).
It also bought shares in Hewlett-Packard Company (HPQ) – in April it acquired an 11.4 percent stake in the company.
Buffett also worked on bitcoin.
He said: “I don’t know if it will go up or down next year or in five or 10 years.
“But one thing I’m pretty sure about is that it produces nothing … It has magic and people attach magic to a lot of things.”
Bitcoin has also likened it to assets that offer a tangible product for the people who own it.
Buffett said, “If you said … for a 1 percent share of all farmland in the United States, pay our group $ 25 billion, I’ll write you a check this afternoon.”
“For $ 25 billion, I now own one percent of the farmland.” If you offer me one percent of all the apartment buildings in the country and you want another $ 25 billion, I’ll write you a check, it’s very simple.
“Now, if you told me you owned all the bitcoins in the world and offered them to me for $ 25, I wouldn’t take it because what would I do with them? I’d have to sell them back to you one way or another.
“It won’t do anything. The apartments will produce rent and the farms will produce food.”
In March, a Fidelity International survey found that two-fifths of British investors (39 percent) fear inflation.
Maike Currie, chief investment officer at Fidelity International, said: “As economist Milton Friedman said,” inflation is tax-free. ” Given that prices are rising at an unprecedented rate for decades, investors are understandably concerned about the impact this may have on their portfolios.
“Rising prices are detrimental to your return on investment because they reduce the true value of your money.
“Four percent inflation will halve the purchasing power of your savings and income in less than 20 years. So 8 percent inflation will have devastating consequences, not just for those approaching retirement and thinking about drawing on their retirement savings.
“However, there are steps you can take to mitigate the impact of inflation on your portfolio – diversification remains the cornerstone of any successful investment portfolio. As storm clouds gather around the inflation outlook and interest rates, look at investments that can bring much-needed diversification to your portfolio. ”