Plus: Hedge Fund Performance: Man vs Machine, Capital Ratios, Venture Investing
Sadly, I won’t be in Omaha tomorrow for the Berkshire Hathaway annual meeting. It’s a shame because as a financial sector analyst, it’s always instructive to hear what Warren Buffett says about the industry. Finance is one of his biggest bets – it makes up 30% of his equity portfolio and, through his insurance businesses, the largest part of his operating holdings. His passion for the financial sector goes back a long way. “[Insurance company] GEICO was my first business love,” he once declared.
While his love of insurance is fairly well known, Buffett has allocated a lot of time and capital to banks over the years, too. “We feel it’s something that we can – that falls within our circle of competence to evaluate… We don’t think it’s beyond us to understand the banking business. And so, it’s – we look at businesses in that area.” In fact, if it wasn’t for a legal change way back in 1969, his allocation to banking would likely be even higher.
Ahead of tomorrow’s meeting then, I thought …