Unveiling The Secrets: How Warren Buffett Gained $10 Billion In 2023

Renowned investor Warren Buffett added nearly $12 billion to his net worth in 2023. Shares of Berkshire Hathaway Inc. BRK rose by nearly 15% over the past year, driving up Buffett's net worth in 2023. 

In the third quarter ended Sept. 30, Buffett repurchased approximately $1.1 billion worth of Berkshire Hathaway's shares. In the first nine months of last year, Berkshire Hathaway repurchased approximately $7 billion worth of shares. 

Buffett, also known as the Oracle of Omaha, is the sixth-richest person in the world, with a net worth of $120.6 billion, according to the Forbes Real-Time Billionaires List. His net worth was around $108 billion by the end of December 2022. 

Japanese Equities: The Gateway to Buffett's Success

Despite the skyrocketing inflation levels over the past few years, Japan kept its benchmark interest rate at negative 0.1%, a sharp contrast to the U.S. interest rates, which are hovering near 22-year highs. 

Identifying an arbitrage opportunity, Buffett has been pumping capital into Japanese equities and bonds. He owns more Japanese stocks than any other stocks outside of the U.S. As of mid-November 2023, Berkshire Hathaway held approximately $827 million worth of Japanese yen-denominated bonds. 

Berkshire Hathaway also maintains a 7.4% stake each in five sogo shosha companies in Japan, namely, Itochu Corp., Marubeni Corp., Mitsubishi Motors, Mitsui Group and Sumitomo Corp. 

"They are really so much similar to Berkshire. They own a lot of different things," Buffett said in an interview with Nikkei Asia.

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Dividend Income And Investment Gains 

Buffett is a long-time advocate of dividend-paying blue-chip stocks. He is expected to have earned more than $6 billion in dividend income in 2023, thanks to his sizable stakes in Bank of America Corp. and Coca-Cola Co. stock. Buffett also bought over 10 million shares of Occidental Petroleum Corp. OXY in December, bringing his total stake to nearly 27%. 

In the third quarter, Berkshire Hathaway posted a $24.1 billion investment loss, primarily because of a decline in Apple Inc.'s AAPL share price. 

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"The amount of investment gains/losses in any given quarter is usually meaningless and delivers figures for net earnings (losses) per share that can be extremely misleading to investors who have little or no knowledge of accounting rules," Berkshire Hathaway said in a statement.

Apple stock rose by 49% in 2023, outperforming the benchmark Nasdaq Composite Index's 44% surge last year. 

Insurance Payoff And Yield Income 

Berkshire Hathaway's operating earnings rose by over 40% year over year to $10.76 billion in the third quarter. This can be attributed to a surge in auto insurance company Geico's profit margins, which Buffett touts as the "crown jewel" of his empire. Geico's underwriting income crossed $1.1 billion in the third quarter. 

Buffett also capitalized on the rise in bond yields by acquiring short-term Treasury bills with yields of at least 5% last year. By the conclusion of the third quarter, the conglomerate possessed $126.4 billion in such investments, a notable increase from the approximately $93 billion held at the end of the previous year.

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