Both the United Kingdom and the United States have seen soaring inflation rates in recent months, and although price increases in the United States slowed in April, the annual inflation rate remained close to a high of 40 years. In April, the US saw the rate slow to 8.3% from 8.5% in March.
By increasing share purchases, Berkshire Hathaway has spent $41.5 billion (about £33.8 billion) this year, Fidelity International reports.
Already a shareholder of the oil and gas multinational Chevron, in the first quarter of 2022, Berkshire Hathaway increased its stake from $4.5 billion to $26 billion.
The company has also boosted its already substantial stake in Apple this year – buying $600m (about £481m) worth of additional shares.
He also bought shares in the Hewlett-Packard Company (HPQ) – taking an 11.4% stake in the company in April.
Buffett also touched on Bitcoin.
He said, “Will it go up or down next year, or in five or 10 years, I don’t know.
“But the one thing I’m pretty sure of is that it doesn’t produce anything… There’s magic and people have attached magic to a lot of things.”
He also likened Bitcoin to assets that provide a tangible product for the people who own them.
Buffett said, “If you said…for 1% interest in all farmland in the United States, pay our group $25 billion, I’ll write you a check this afternoon.”
“For $25 billion, I now own 1% of the farmland. If you offer me 1% of all the apartment buildings in the country and you want another $25 billion, I’ll write you a check, it’s very simple.
“Now if you told me you own all the bitcoins in the world and offered it to me for $25, I wouldn’t take it because what would I do with it? I’d have to sell it back to you for one way or another.
“It’s not going to matter. The apartments will produce rents and the farms will produce food.”
In March, a study by Fidelity International found that two-fifths of UK investors (39%) were worried about inflation.
Maike Currie, Investment Director for Personal Investing at Fidelity International, comments: “As the economist Milton Friedman said, ‘Inflation is taxation without legislation’. With prices rising at a rate not seen in decades, investors are rightly worried about the impact this could have on their portfolio.
“Rising prices hurt investment returns because they eat away at the real value of your money.
“4% inflation halves the purchasing power of your savings and income in less than 20 years. So an 8% inflation rate will have devastating consequences, especially for those nearing retirement. retirement and plan to draw income from their retirement savings.
“But there are steps you can take to lessen the impact of inflation on your portfolio – diversification remains the cornerstone of any successful investment portfolio. As storm clouds gather around the outlook for inflation and interest rates, look for investments that can inject much-needed diversification into your portfolio.