. Berkshire's railroad business, BNSF, along with its energy company did see year-over-year earnings declines last quarter.
The 92-year-old investing icon believes that some of his managers at Berkshire subsidiaries were caught off guard by the swift change in consumer behavior, as they put the Covid-19 pandemic behind them. This led them to overestimating demand for certain products, and now they will need sales to get rid of the excess inventory.
"It is a different climate than it was six months ago. And a number of our managers were surprised," Buffett said. "Some of them had too much inventory on order, and then all of a sudden it got delivered, and people weren't in the same frame of mind as earlier." The U.S. economy is grappling with a series of aggressive rate hikes, which partly triggered three bank failures in the span of just a few weeks due to mismatched assets and liabilities. The Federal Reserve just approved its 10th rate hikes since 2022, taking the fed funds rate to a target range of 5%-5.25%, the highest since August 2007.
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Source: CNBC - 🏆 12. / 72 Read more »