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Amazon Got a Place in Berkshire Hathaway's Portfolio

05 May 2019

On Friday, shares of Amazon jumped more than 3%.

Speaking ahead of Berkshire's annual shareholders meeting on Saturday in Omaha, Nebraska, Buffett also told CNBC he'd been "an idiot for not buying" shares in Amazon in the past. Knowing this, a headline that Berkshire Hathaway was buying shares in Amazon would understandably generate interest in the markets.

For what it's worth, few expect any major changes at Berkshire after Buffett retires or passes away.

"One of the fellows in the office that manage money.bought some Amazon so it will show up in the 13F" later this month, Buffett told CNBC, referring to Berkshire's quarterly report to the Securities and Exchange Commission in which it details its equity holdings.

Warren Buffett, the CEO and chairman of the Berkshire Hathaway, doesn't think the US political system is shifting toward socialism anytime soon, despite a progressive push from some Democrats.

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Buffett has been prepping shareholders for the possibility of more stock buybacks, a move he's largely shunned throughout his more than six-decade career. Buffett has pointed to Apple's strong profitability as one of the reasons to bet on the company. That was more than the $1.3 billion that Berkshire, which historically has preferred using its cash on equities or acquisitions, spent all of past year after relaxing its policy on buybacks. By contrast, Amazon's shareholders have allowed Bezos to expand aggressively at the expense of delivering consistent profits.

Always on the lookout for a good deal, Buffett over the years has scooped up a diverse array of companies like the metal components maker Precision Castparts; wholesale supply chain firm McLane Company; underwear maker Fruit of the Loom; carpet manufacturer Shaw Industries; Duracell batteries and the Dairy Queen chain of fast food restaurants.

It's a question that needs to be answered. The Berkshire investment is contingent on Occidental completing its proposed acquisition of Anadarko.

The Amazon stake further cements the relationship between Berkshire and Bezos's company.

Amazon Got a Place in Berkshire Hathaway's Portfolio