Trump vs Michael Burry: US Prez buys shares of Warren Buffett's firm but 'Big Short' investor feels it's not an attractive bet

Donald Trump's financial disclosures showed that the US President bought shares of legendary investor Warren Buffett's Berkshire Hathaway in June, which 'Big Short' fame Michael Burry recently said is no longer an attractive investment.

Trump bought between $1 million and $5 million of Berkshire Hathaway shares on June 18 and then sold a smaller amount on June 24, marking one of the most significant portfolio rejig out of his more than 1,000 securities trades in June.

This comes as Greg Abel, the new Berkshire Hathaway CEO, has started using some of the company’s record cash pile. The firm spent around $4.5 billion to buy back its own shares during the April-June quarter, and purchased nearly $20 billion worth of equities during the period.


Among its purchases was about $10 billion of additional Alphabet stock, the parent company of Google and YouTube, making it one of Berkshire's largest equity holdings. Berkshire ended June with $364.7 billion in cash and cash equivalents, down from a record $380.2 billion three months earlier. The company also said it spent $6.8 billion in late July to acquire shares of homebuilder Taylor Morrison, according to Reuters.

Also Read | Donald Trump revealed 1,000 stock trades in June: Here is what he bought and sold

Why Michael Burry feels Berkshire Hathaway is longer an attractive bet

While the US President seems to be bullish on the company founded by legendary investor Warren Buffett, ace American investor Michael Burry is not convinced.

Burry, who famously predicted the 2008 financial crisis correctly, feels Berkshire Hathaway has lost its charm as an attractive investment after Warren Buffett handed over the reins to his successor Greg Abel. He said that his biggest fear for Berkshire Hathaway was that when Buffett finally steps down, his successor would be too old and “otherwise not Warren”, and hence he would not have patience for his “fat pitch”. “I believe this fear has come true. I do not find Berkshire an attractive investment going forward,” he wrote in a blog post earlier this month.

Michael Burry noted that not much of Berkshire’s large cash pile has been spent. “However, these first steps look to be more framing moves than investment moves,” he added.

Berkshire Hathaway’s financials

Berkshire's quarterly operating profit increased 16% to $12.98 billion, from $11.16 billion a year earlier, exceeding analysts' expectations. Net income more than doubled to $25.67 billion, from $12.37 billion a year earlier. The figure includes unrealized gains and losses on Berkshire's stock portfolio, which the company has urged investors to look past because of their volatility. Revenue rose 10% to $101.81 billion after remaining largely stagnant in previous quarters.

In a recent interview with CNBC, Buffett said it was him, not his successor and new Berkshire Hathaway CEO Greg Abel, who led the conglomerate’s massive investment in Google-parent and tech giant Alphabet, although it is not among his favourite bets. “I initiated it,” he said in an interview with CNBC.

“I am not doing anything that he does not approve of. He is not doing anything I don’t approve of. We talk all the time, but he is the decider,” the 95-year-old Berkshire Chairman added, referring to his CEO successor, Greg Abel.

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(With inputs from agencies)

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