Mercer actuary David Knox says the data used to determine the old age dependency ratio is “totally out of date” and overstates the severity of the problem.
From their inception, SMSFs have always attracted more than their fair share of criticism. Now it’s an ageing membership that’s being used to restrict their numbers.
The 16 companies Warren Buffett bought in 2022
Investing icon Warren Buffett once said, “Be fearful when others are greedy, and greedy when others are fearful”. And that’s exactly what he and his partner Charlie Munger have been doing. When markets were soaring over 2021, his holding company Berkshire Hathaway Inc (NYSE: BRK.A) was a net seller for five consecutive quarters. But since investors have been spooked by the market decline in 2022, Buffett unsurprisingly has been adding to new and existing positions.
For the first quarter of 2022, he purchased a whopping $41 billion in net equities across 16 companies. It’s Berkshire’s largest spending spree since 2008.
Berkshire added to Chevron Corporation (NYSE: CVX), which is now the conglomerate’s fourth-largest equity position. The oil giant has benefitted from rising commodity prices and is a solid inflation hedge shielding the remainder of the portfolio. Similarly, Buffett has acquired a 14% stake in Occidental Petroleum Corporation (NYSE: OXY). Buffett previously said the investment was a bet on domestic oil production and global oil prices. He noted the benefit of being able to produce domestically rather than finding “11 million barrels a day somewhere else in the world to take care of keeping the American industrial machine working”.
He also added to positions in Floor & Decor Holdings Inc (NYSE: FND), Liberty Media Formula One Group (NASDAQ: FWONA), Restoration Hardware Holdings Inc (NYSE: RH), General Motors Company (NYSE: GM) and Apple Inc (NASDAQ: AAPL). C
Activision Blizzard Inc (NASDAQ: ATVI) is different to the rest of the purchases. Buffett is going down the merger arbitrage game, a type of investing he and Munger use to do “50 years ago”. The spread between the share price and the takeover offer by Microsoft Corporation (NASDAQ: MSFT) seemed too big, so he purchased 9.5% of the company betting the deal goes through.
Other new positions include Paramount Group Inc (NYSE: PARA), Ally Financial Inc (NYSE: ALLY), McKesson Corporation (NYSE: MCK), Markel Corporation (NYSE: MKL), Nu Holdings Ltd (NYSE: NU), Celanese Corporation (NYSE: CE), Alleghany Corporation (NYSE: Y) and HP Inc (NYSE: HPQ).
Berkshire exited Wells Fargo & Co (NYSE: WFG) – a company it first bought in 1989 – and replaced it with Citigroup Inc (NYSE: C). The bank is currently undergoing a turnaround into more profitable services after historically underperforming peers. Citi currently trades below its book value, suggesting its assets are worth less than stated or the business itself will go backwards.
The two other exists are AbbVie Inc (NYSE: ABBV) and Bristol-Myers Squibb (NYSE: BMY). Buffett also reduced investments in Kroger Co (NYSE: KR), Verizon Communications (NYSE: VZ), Store Capital Corp (NYSE: STOR) and Royalty Pharma plc (NASDAQ: RPRX).
Buffett continues to “bet on America”, evident by his purchases in staple industries like furniture, cars and consumer electronics. Interestingly, the divestments largely centre on pharmaceutical companies. Buffett has said he doesn’t try to predict macro factors like inflation or interest rates, instead focusing on the intrinsic value of the business. Clearly, he thinks the recent market weakness is a buying opportunity.
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