Tailored Investment Solutions Berkshire Hathaway Units Series 1 & 2 Update

This week’s technical update will cover: Tailored Investment Solutions Berkshire Hathaway Units Series 1 & 2 Update.

One of the benefits of being a part of The SMSF Club is the access to exclusive investment opportunities specifically designed for SMSFs.

Every year, Warren Buffett releases his annual letter to shareholders. This year’s letter was once again full of wise investment advice, humour, Buffett’s outlook on the global economy, his view on politics, but also, most importantly, stellar results.

Berkshire Hathaway’s quarterly profit climbed 32% on the back of investments and earnings from the company’s expanding stable of operating businesses. Net income rose to $US5.48 billion ($US3,333 a share), from $US4.16 billion ($2,529 a share) a year earlier. Operating earnings, which exclude some investment results, were $US2,843 a share. The results cap another record year for Buffett. While Berkshire’s insurance and investment results continue to fluctuate, the company owns dozens of businesses that churn out steadier earnings. In recent years, profit from these wholly owned businesses, including railways, utilities, banks, newspapers, and houses to name just a few, have become a greater portion of the bottom line because of Buffett’s relentless deal making.

2015 was another big year of deal making for Buffett; his activity included:

• Buying a network of U.S. car dealerships
• A $37.2 billion buyout of aerospace parts manufacturer Precision Castparts Corp.
• Increasing Berkshire’s holdings in IBM, Coca Cola, American Express, and Wells Fargo
• Investing $1.4 billion in direct shares
• Investing $2.8 billion in listed income securities
• Investing $16 billion in property, plant and equipment
• Making 29 ‘bolt-on’ acquisitions
• Making Berkshire’s first Australian investment, by purchasing a stake in Insurance Australia Group
• Finalising the merger between Kraft and Heinz (a $40 billion deal)
• Making $805 million through derivative trading in the fourth quarter alone

Buffett has also invested heavily recently in Oil and expects to complete the acquisition of the Duracell battery business from Procter & Gamble Co. this month.

The Berkshire Hathaway A Class share price has skyrocketed more than $6,800 last week, making it one of the best performing weeks in the company’s history.

Both Series 1 & 2 have coupon determination dates mid-way though this year, with Series 1 investors having already received a coupon last year that marked a 32% return!

Buffett’s letter to shareholders can be found here.