Warren Buffett becomes sixth member of US$100 billion club

NEW YORK (BLOOMBERG) – Legendary investor Warren Buffett has been a fixture at the top of the world’s wealth rankings for decades, but in recent years he’s slipped down the list as tech fortunes soared and his hot hand cooled.

Now, at 90, his net worth has blown past US$100 billion (S$134 billion).

The Berkshire Hathaway chairman’s wealth jumped on Wednesday (March 10) to US$100.4 billion, according to the Bloomberg Billionaires Index. That makes Mr Buffett the sixth member of the US$100 billion club, a group including Amazon founder Jeff Bezos, Tesla founder Elon Musk and his friend Microsoft co-founder Bill Gates.

The clan’s combined wealth has grown rapidly, fueled by government stimulus, central-bank policy and the surging equity market. On Wednesday, US President Joe Biden’s US$1.9 trillion Covid-19 relief bill cleared its final congressional hurdle as the House voted to approve the legislation, adding to the US$3 trillion or so in stimulus Washington has already disbursed in the past year.

Berkshire, the source of virtually all of Buffett’s wealth, has had a good start to 2021. The firm’s A shares are up 15 per cent this year, outpacing the 3.8 per cent gain of the S&P 500 Index. That’s been helped by Mr Buffett’s recent push to spend record amounts buying back Berkshire’s own stock, a notable shift for an investor who previously preferred to use the US$138 billion cash pile to buy other businesses or common shares.

Share Buybacks

Mr Buffett’s been struggling in recent years to find sizeable deals to spark Berkshire’s growth, partially due to the sheer size of the conglomerate. That’s caused the shares to underperform the S&P 500 over the past five years. But in 2020, Mr Buffett spent a record US$24.7 billion on buybacks and filings indicate he’s already bought at least US$4.2 billion worth of stock through mid-February.

Surpassing US$100 billion is all the more notable considering how much the Omaha billionaire has given away. A co-founder of the Giving Pledge, a campaign to encourage billionaire philanthropy, Mr Buffett has donated more than US$37 billion in Berkshire stock since 2006. Without those gifts, which have cut his holdings of Berkshire Class A shares nearly in half, he’d be worth more than US$192 billion.

The staggering amount of wealth accumulated by the ultra-wealthy – US$1.8 trillion by the world’s 500 richest in 2020 alone – highlights the K-shaped recovery that’s taking place as the US emerges from the pandemic. While millions of disproportionately poor, working-class and minority people remain unemployed, the rich have seen incomes and net worth levels rise thanks to a buoyant stock market and rising home prices.

Meanwhile, more than 8 million Americans – including many children – fell into poverty in the second half of last year, according to an analysis by University of Chicago economist Bruce Meyer, University of Notre Dame’s James Sullivan and Zhejiang University’s Jeehoon Han.

Mr Buffett added US$1.9 billion to his fortune on Wednesday as Berkshire Class A shares hit a record high, helping lead a second day of gains for the S&P 500.

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