In the final three months of 2019, Berkshire Hathaway, led by famed value investor Warren Buffett, repurchased $2.2 billion of its own stock, the most the company has spent on repurchases in a single quarter. The record amount cam after the company spent $700 million on share buybacks in the previous quarter.
Buffett in his annual letter to shareholders, which is released in tandem with the company's year-end report, discussed both the "sense and nonsense of stock repurchases." Berkshire Hathaway will only buy back its stock if Buffett and vice chair Charlie Munger believe it is selling for less than it is worth, and the company is still left with ample cash after the purchase, he wrote.
"Over time, we want Berkshire's share gown to go down," Buffett wrote. "If the price-to-value discount widens, we will likely become more aggressive in purchasing shares. We will not, however, prop up the stock at any level." Berkshire Hathaway loosened its rule around share buybacks in 2018 making it easier for Buffett and Munger to authorize buybacks when the repurchase price is "below Berkshire's intrinsic value,"
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