The more you give, the more you get philosophy is working rather well for the American business magnate, aka Oracle of Omaha, Warren Buffet. The super successful investor of all time boasts a net worth of nearly $104 billion and his company could pocket almost $4 billion in interest and other investment income this year. When compared to the last two years, the amount has not only doubled but quadrupled. The number was less than $2 billion in 2022 and below $600 million in 2021. “Berkshire’s income from Treasuries has soared largely because of the sharp rise in interest rates over the past 12 months,” explained Insider’s Theron Mohamed.
He continued, “In a bid to curb historic inflation, the Federal Reserve has hiked its benchmark rate from virtually zero to over 4.5%, and penciled in further increases. Higher rates have translated into larger yields on government bills and bonds.” Mohamed added: “Berkshire also benefited from the completion of its Alleghany acquisition last year, as it gained ownership of the insurer’s interest-generating assets.”
While the world’s fifth-wealthiest person struggled to find bargains during the first two years of the pandemic, his luck changed last year (hardly surprising). James Shanahan, the senior equity research analyst at Edward Jones, expressed, “There is no doubt that Berkshire’s investment income has benefited from rising short-term interest rates,” said. The company also profited from completing its Alleghany acquisition as it gained ownership of the insurer’s interest-generating assets. Berkshire spent a record $68 billion on stocks last year.