Warren Buffett has sold off nearly all of Berkshire Hathaway's Wells Fargo & Co. stock. After more than 31 years of investment in the bank, a regulatory filing on Monday 17 May revealed that Berkshire Hathaway now only has $26.4 million (£18.6m)-worth of shares in one of America's biggest banks as of 31 March. That's a considerable drop from the $32 billion (£22.5bn) it owned in January 2018. 

Ever since it emerged that Wells Fargo was putting pressure on employees with targets that led them to sell customers multiple products that they often didn't need, or even create false accounts, the bank's relationship with Berkshire Hathaway has been rocky. Buffett himself dubbed Fargo's controversial incentive scheme as "dumb" in a CNBC interview in February 2020, and he also criticised the bank's slow reaction in dealing with the scandal. The same month Wells Fargo agreed to pay $3 billion (£2.1bn) to the US Justice Department and Securities and Exchange Commission to resolve criminal and civil investigations into its fraudulent practices.

But that's not the only big move Berkshire Hathaway and Warren Buffett has made recently. Click or scroll through to find out what else Buffett has been up to...

Warren Buffett has finally confirmed that his successor as Berkshire Hathaway CEO will be Greg Abel. At Berkshire Hathaway's virtual annual meeting on 1 May, 90-year-old Buffett reluctantly revealed that the current vice-chairman was lined up for the role "if something happened", despite the fact that Buffett had previously refused to comment on the subject in his annual letter to shareholders in March this year.

Buffett's choice of successor isn't much of a surprise. While he had avoided naming him or her until now, Buffett revealed way back in 2012 that the board had identified Berkshire Hathaway's next boss. In his annual shareholders letter this year, Buffett wrote "Charlie [vice chairman Charlie Munger, who is 97 years old] and I long ago entered the urgent zone [in terms of age]. That’s not exactly great news for us. But Berkshire shareholders need not worry: Your company is 100% prepared for our departure." 

Greg Abel (pictured), 58, is a vice-chairman at Berkshire Hathaway whose work helped build up the energy side of the conglomerate, which owns companies including Duracell and Dairy Queen and has stakes in the likes of Coca-Cola and Apple. Abel has been working for the company since 1999, and since 2018 he's been in a vice-chairman role, overseeing areas such as railway companies, utilities, manufacturers, retailers and car dealerships according to reports by the Guardian. And Buffett has been full of praise for Abel's work, describing how “he does a far better job of that than I was doing previously.” Abel was the one to answer questions about the company's response to climate change at the meeting on Monday.

Another vice-chairman, Ajit Jain, who oversees the investment company's re-insurance operations, was rumoured to be a potential candidate for the CEO role. However, Jain is a decade older than Abel, and Buffett has indicated to CNBC that Abel's age was part of the decision, stating that "the likelihood of someone having a 20-year runway though makes a real difference."

March's annual letter to Berkshire Hathaway shareholders provided plenty of insights from the investing mastermind. First up, Buffett advised against going by generally accepted accounting principles (GAAP) to gauge a company's performance as they are distorted by stock portfolio gains and losses. “Operating earnings are what count the most,” wrote the investing guru. Last year, Berkshire Hathaway's turnover based on GAAP amounted to $42.5 billion (£30.6bn), but its operating income totalled just $21.9 billion (£15.8bn), a decline of 9% from the previous year.

In the letter Buffett extolled the virtues of buying back shares that are trading below their intrinsic value, revealing that Berkshire Hathaway spent a record $24.7 billion (£17.8bn) last year repurchasing the equivalent of 80,988 Class A shares. This has enabled shareholders to increase ownership in Berkshire Hathaway businesses by 5.2% at no cost to themselves, and makes for a judicious use of the conglomerate's enormous cash pile in a year that, perhaps unsurprisingly, saw no major acquisitions.

The ever-optimistic Buffett paid homage to US ingenuity and innovation in his letter earlier this year, proclaiming “there has been no incubator for unleashing human potential like America” and describing the nation's economic progress as “breathtaking”. The investing guru showered much of the praise on the middle part of the country, which is often overlooked in favour of the East and West Coasts. The takeaway? “Never bet against America.”

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Not everything Buffett touches turns to gold and the 'Oracle of Omaha' is the first to admit his mistakes. In his letter the Berkshire Hathaway CEO explains that last year's “ugly $11 billion write-down” was almost entirely the consequence of a major blunder he made in 2016 by paying over the odds for aircraft and industrial parts maker Precision Castparts, which cost the conglomerate $32.1 billion (£23bn) and remains its largest ever acquisition.

Buffett also shared a fact about Berkshire Hathaway that he “never suspected”: his business owns more US infrastructure assets – property, plant and equipment – by value than any other company. These fixed assets are worth a humongous $154 billion (£111bn). Its nearest competition is AT&T, which has $127 billion (£91bn)-worth in its portfolio.

March's letter highlighted the importance of Berkshire Hathaway's “family jewels”, the four businesses that represent the lion's share of the conglomerate's value. It owns three of these outright: the insurance arm of the business; railroad firm BNSF; and Berkshire Hathaway Energy; plus its 5.2% stake in Apple, a position it has grown significantly in recent years thanks to buybacks, which has turned out to be incredibly lucrative. 

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Buffett attributes much of Berkshire Hathaway's success to its mix of wholly-owned companies and sizeable stakes. In March the head honcho wrote that this differentiates it from traditional conglomerates, which he criticised for limiting themselves to buying companies in their entirety. This, Buffett argues, mean they miss out on investing in the most successful firms, since the best businesses have “no interest in anyone taking them over”.

As well as reiterating his commitment to playing the long game, Buffett repeats his belief that bonds are a bad investment. “Bonds are not the place to be these days,” he writes, warning that “fixed-income investors worldwide – whether pension funds, insurance companies or retirees – face a bleak future.”

 

Buffett has expressed concern over finding a big acquisition to invest Berkshire Hathaway's nearly $145 billion (£105bn) cash pile. In fact he has taken aim at SPACs – special purpose acquisition companies – which he describes as a "killer". While Buffett doesn't believe that they will last for ever, he stated that "it’s where the money is now and Wall Street goes where the money is”. Buffett (pictured with right-hand-man Charlie Munger) has also described the current stock market as a "casino" as the world's current situation has led millions to take a gamble and enter the market.

However, there are some major subjects that Buffett hasn't spoken out on. Seemingly due to Buffett's desire to focus on business and avoid taking a political stance, the March letter maded no direct mention of hot topics such as last year's presidential election, the Black Lives Matter protests and January's storming of the Capitol, while COVID-19 was only referred to very briefly, which one commentator at the time called “tone deaf” and “disappointing”. 

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