Warren Buffett Joins $ 100 Billion Club, Highlighting K-Shaped Recovery | Business and economic news

Berkshire Hathaway chairman Warren Buffet saw his net worth surpass the Bloomberg Billionaires Index’s $ 100 billion mark, underlining a K-shaped U.S. recovery that has seen more than eight million Americans fall into the poverty in the second half of 2020.

Warren Buffett has been a fixture on the global wealth rankings for decades, but in recent years he has slipped to the bottom of the list as tech fortunes skyrocket and his hot hand cooled.

Now, at age 90, his net worth has surpassed $ 100 billion.

The wealth of the chairman of Berkshire Hathaway Inc. jumped to $ 100.4 billion on Wednesday, according to the Bloomberg Billionaires Index. That makes Buffett the sixth member of the $ 100 billion club, a group that includes Jeff Bezos, Elon Musk, and his friend Bill Gates.

The clan’s combined fortunes grew rapidly, fueled by government stimulus measures, central bank policy and the surging stock market. President Joe Biden’s $ 1.9 trillion Covid-19 relief bill on Wednesday cleared its latest hurdle in Congress as the House votes to approve the bill, adding to the estimated $ 3 trillion in stimulus that Washington has already disbursed last year.

Berkshire, the source of nearly all of Buffett’s wealth, got off to a rapid start through 2021. The company’s A shares have risen 15% this year, topping the 3.8% gain in l S&P 500 Index. This was aided by Buffett’s recent push to spend record amounts to buy back Berkshire’s own stock, a notable change for an investor who preferred to use the $ 138 billion cash stack to buy ‘other companies or ordinary shares.

Share buybacks

Buffett has struggled in recent years to come up with significant deals to spur Berkshire’s growth, in part due to the sheer size of the conglomerate. This has led stocks to underperform the S&P 500 over the past five years. But in 2020, Buffett spent a record $ 24.7 billion on buybacks, and filings indicate he has already bought at least $ 4.2 billion in shares through mid-February.

“His warm-up for the share buyback was clearly welcomed by investors,” said Matthew Palazola, analyst at Bloomberg Intelligence, who also noted that last year’s fears about the initial impact of the pandemic on the group were overdone. “The strength of Berkshire’s stock portfolio, particularly Apple, has contributed significantly to book value,” he said.

Going over $ 100 billion is all the more remarkable considering what billionaire Omaha has given. Co-founder of Giving Pledge, a campaign to encourage philanthropy, Buffett has donated more than $ 37 billion in Berkshire shares since 2006. Without these donations, which have nearly halved his holdings of Berkshire Class A shares, he would be worth over $ 192 billion.

The staggering amounts accumulated by the ultra-rich – $ 1.8 trillion for the world’s richest 500 in 2020 alone – highlight the K-shaped recovery unfolding as the United States emerges from the world. pandemic. While millions of disproportionately poor people, working class and minorities remain unemployed, the rich have seen their incomes and net worth surge thanks to a vibrant stock market and rising house prices.

Meanwhile, more than 8 million Americans – including many children – fell into poverty in the second half of last year, according to an analysis by University of Chicago economist Bruce Meyer, James Sullivan of Notre Dame University and Jeehoon Han from Zhejiang University.

Buffett added $ 1.9 billion to his fortune on Wednesday as Class A Berkshire shares hit a record high, helping to lead a second day of gains for the S&P 500.

(Updates with analyst commentary in seventh paragraph.)
–With assistance from Catarina Saraiva and Ben Stupples.

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