Warren Buffett’s Berkshire Hathaway Inc. bought back about $1.3 billion of its own stock last year, but the billionaire investor says in a new interview that figure could wind up totalling as much as $100 billion over time.
In a wide-ranging interview published Thursday by the Financial Times, Berkshire’s chairman and chief executive said the company will keep buying back its shares as long as they’re priced at a point he believes is lower than their true value. “This amounts, in his view, to buying out a partner at an attractive price,” as the FT put it.
Buffett does not welcome the prospect of Berkshire stock one day trading at a “fair” price while other companies’ stocks appear expensive. “That’s my nightmare,” he told the FT.
Buffett gave no timeline nor indicated any imminent moves in the interview, but acknowledged the company could buy back as much as $100 billion of its stock over time.
Last year, Berkshire approved a plan to allow it to repurchase shares whenever Buffett or Vice Chairman Charlie Munger deem it worthwhile. Berkshire did not appear to buy back any of its shares in the first part of 2019, and in Buffett’s 15-page annual letter to shareholders in February, he didn’t say much about buybacks, other than that Berkshire would be a “significant repurchaser of its own shares” over time, and that the repurchases will depress the stock’s book value, which he has said he is trying to de-emphasize as a yardstick to the company’s intrinsic value.
In his letter, Buffett said Berkshire had about $130 billion in cash and short-term investments. The Omaha, Neb.-based conglomerate has a market cap of about $522 billion.
Elsewhere in the Financial Times interview, Buffett brushed off questions about his eventual successor, and said he has no plans to step down anytime soon.
“I’m having a vacation every day. If there was someplace else I wanted to go, I’d go there,” he said. “I have more fun here than I think any 88-year-old is having, virtually, in the world.”
Berkshire’s Class A shares BRK.A, +0.79% are up 4% year to date, and 8% over the past year, compared to the S&P 500’s SPX, -0.04% gains of 17% and 11%, respectively, over those spans.