The inversion of the yield curve, coupled with the Federal Reserve reversing course from monetary tightening to loosening, is expected to negatively impact the company's net interest income for numerous quarters. The custodial bank and asset management firm has lost about 11% of its value, which, inclusive of dividends, has saddled Berkshire with a year-to-date loss of $339.1 million.īank of New York Mellon has been dealing with two issues that have negatively impacted its business. Surprisingly, the traditionally nonvolatile Bank of New York Mellon (NYSE: BK) has been something of a lemon for Warren Buffett in 2019. Bank of New York Mellon: $339.1 million in market value lost The facade of a Federal Reserve building.
The turnaround could be slow, but I expect Teva to be just fine. The company remains profitable, and CEO Kare Schultz has overseen a roughly $8 billion reduction in net debt and the elimination of almost $3 billion in annual expenses. However, as one of the largest generic-drug producers in the world, Teva shouldn't be written off just yet. With Teva sporting more than $28 billion in debt, there's real concern about the company's ability to survive and thrive over the long run, which has been clearly reflected in its share price.Īs a Teva shareholder, I don't deny the issues that lie ahead. To make matters worse, the company has also been contending with a slew of opioid-based lawsuits. Teva has been a mess for the better part of two years now, having contended with a bribery scandal, the departure of top-level executives, the loss of exclusivity on its top-selling brand-name drug Copaxone for multiple sclerosis, and generic-drug price weakness. Even though Teva wasn't a direct Buffett pick - a member of his team chose to purchase Teva - it's nevertheless cost nearly $369 million in 2019. While Kraft Heinz is Berkshire's monetary loser, brand-name and generic-drug developer Teva Pharmaceutical Industries (NYSE: TEVA) is the company's biggest percentage loser, with 55.3% of its market value being wiped away through August. Teva Pharmaceutical Industries: $368.5 million in market value lost Prescription generic tablets covering up a one hundred dollar bill, with only Ben Franklin's eyes peering through. For the time being, Buffett can do no more than watch and wait for Kraft Heinz to right the ship. The problem with being such a large shareholder is that there isn't a good way to pare down Berkshire's stake without adversely impacting Kraft Heinz's stock. Though Buffett has admitted that Berkshire overpaid for its stake in Kraft Heinz, he's also committed to the position. And, as the icing on the cake, the company also reduced its dividend. Kraft Heinz may be forced to sell some of its brands to reduce its long-term debt, but selling in a position of weakness is unlikely to get the company its asking price. What Kraft Heinz needs is to spend money to reignite growth in its brands, but it simply doesn't have the financial means to do so. Earlier this year, the company took a $15.4 billion writedown on a number of its popular brands, although it's still left with $36 billion in goodwill and $29.8 billion in long-term debt as of its most recent quarter. The big issue with Kraft Heinz is its ugly balance sheet. Even the greatest investors on the planet are bound to make mistakes from time to time, and Buffett is no exception. Suffice it to say, Buffett has had a lot of success as an investor.īut one thing Buffett and his team are not is perfect. Right now Berkshire Hathaway oversees an investment portfolio with a net worth of more than $200 billion, and also has a war chest of $122.4 billion, as of the end of its most recent quarter. Mind you, his net worth would extend well beyond $100 billion if not for generous charitable contributions throughout the years.Īs the CEO of conglomerate Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B), Buffett has overseen the acquisition of roughly five dozen businesses from a variety of industries and sectors, as well as countless investments. In a little more than six decades, the Oracle of Omaha, as he's affably known, has grown roughly $10,000 in seed capital to a net worth of almost $80 billion. When the history books are written, Warren Buffett will likely go down as one of the greatest investors of our time.
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