- Warren Buffett’s Berkshire Hathaway has made surprise bets on Barrick Gold and Snowflake in recent months, clashing with the investor’s past warnings about gold, tech stocks, and IPOs.
- Berkshire’s bosses may be pursuing smaller, more frequent investments and cashing in on corporate actions, Brian Gongol, a longtime Berkshire shareholder, told Business Insider.
- “I wouldn’t be surprised if Buffett, Weschler, Combs, and Ajit Jain all got on the phone and had a talk where they decided to ‘think small’ with some fraction of the company’s cash pile,” Gongol said.
- Buffett and his team also signaled Berkshire was “the best big investment they could find” when they spent $5.1 billion buying back stock in May and June, Gongol said.
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Warren Buffett’s Berkshire Hathaway stunned investors when it revealed a $560 million stake in Barrick Gold in August, and shocked them again with its $735 million bet on Snowflake when it went public in September.
After all, the billionaire investor has blasted gold as an inferior asset and repeatedly warned against backing aggressively valued, lossmaking technology companies, and IPOs.
Yet Barrick and Snowflake aren’t necessarily betrayals of Buffett’s principles, according to Brian Gongol, a longtime Berkshire shareholder and close follower of the company.
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“At first glance, the Snowflake investment really does look out of character — even for Weschler and Combs,” Gongol told Business Insider, referring to Buffett’s two portfolio managers, Ted Weschler and Todd Combs.
However, he pointed to Buffett’s description of “work-outs” — investing opportunities driven by corporate actions such as mergers, spinoffs, and reorganizations — in his 1962 letter to investors in his partnership.
“An IPO is