Warren Buffett’s Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) has just revealed it has invested US$860 million in Amazon.Com Inc (NASDAQ: AMZN) shares.
Berkshire Hathaway has been one of the best-performing businesses in the world over the past 50 years by investing in other businesses, both listed and unlisted. Legendary investor Warren Buffett has grown it to be one of the biggest companies in the world.
Why Did Warren Buffett Buy Amazon Shares?
Well, he didn’t buy Amazon shares. It was actually one of his investment lieutenants, Todd Combs and Ted Weschler.
Warren Buffett is famous for sticking to what he calls his ‘circle of competence’, in other words he only invests in what he can understand. That’s why he has avoided investing in nearly all technology businesses until recently. He personally instigated the purchase of a large amount of Apple shares.
It has been revealed that Berkshire Hathaway has invested US$860.6 million into Amazon shares at the end of March.
You may seen a couple of weeks ago that the eCommerce giant reported a net profit of US$3.6 billion in the first quarter of 2019 with operating cashflow growing by 89% to US$34.4 billion.
Amazon seems to be finally delivering consistently profitable numbers even though it is still heavily investing for growth in places like Australia and in initiatives such as its own aeroplane fleet of delivery planes.
Is Berkshire Hathaway Or Amazon A Buy Today?
I am no expert on either company, though I appreciate the vision and focus that both Jeff Bezos and Warren Buffett (with Charlie Munger) had to create their businesses of today. I think both businesses will continue to be huge and grow even bigger over time.
The great thing about both Amazon and Berkshire Hathaway is that they continue to expand in their existing specialities whilst thinking of new sectors to go into. I’m very interested to see what the healthcare initiative between them and Jamie Dimon from JPMorgan turns into in reality in the US.
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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).
At the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.