Warren Buffett Steps Outside His Comfort Zone and Makes Rare Investment in Fintech

Berkshire Hathaway goes beyond its blue chip roots.

Warren Buffett has grown Berkshire Hathaway and made billions by investing in companies in established markets. He has built an empire making careful picks of “blue chip” stocks.

However, the Oracle of Omaha recently expanded his portfolio and stepped outside his comfort zone to do so. Berkshire Hathaway made a $600 million investment in two fintech companies over the last few months, The Wall Street Journal reported on Monday, Oct. 29. The two companies in question are Brazil-based payment processor StoneCo and India-based payment services company Paytm. The two are the most widely-used pay services in their respective regions, according to Fox Business.

Read more about the almost-90-year-old’s ventures and mistakes, including how he has shared his success along the way. Buffett was named number 16 on Forbes’ Powerful People of 2018 list and is currently ranked as the third wealthiest person in the world.

Warren Buffett Net Worth: $84.7B

  • Net worth: $84.7 billion
  • Age: 88
  • Birthday: Aug. 30, 1930
  • Primary sources of wealth: Business, investments
  • Career highlights: Forbes’ 16th most powerful person in 2018, philanthropy

Check Out: How Rich Was Warren Buffett at Your Age?

Warren Buffett’s Company: Berkshire Hathaway

The centerpiece of Buffett’s success comes from his work as CEO in the conglomerate Berkshire Hathaway. Berkshire Hathaway owns more than 60 companies, including ice cream retailer Dairy Queen, insurer Geico and battery brand Duracell, the company recently reported a sharp rise in second-quarter earnings this year, totaling about $12 billion, according to the Associated Press. The profit report was a shock, as in the previous quarter the company had announced a $1.1 billion loss in the first three months of the year.

As a result of its success, Berkshire Hathaway’s class B stocks rose from $160 at the beginning of 2017 to $215 in 2018. Although the price has been fluctuating, Forbes has estimated the conglomerate to continue growing throughout the year.

Warren Buffett Investments and Stocks

The Nebraska-bred business mogul also broke headlines earlier in 2018 as he secured more than $2 billion with Apple shares. Berkshire Hathaway held 239.6 million shares in the technology company when it rose 5.9 percent, thus contributing to the astounding rebound in earnings from the conglomerate in 2018’s second quarter. The investor has not been shy about his interest in Apple, as Buffett told CNBC in May that he “would love to own 100 percent of it” and admires its management and “the way they think.”

As a value investor, Buffett tends to invest his money in companies that seem undervalued compared to their fundamental value.

Here’s a look at some of Buffett’s investments that have paid off:

  • American Express
  • Coca-Cola
  • Gillette
  • Wells Fargo

Don’t Miss: 10 Companies You Would Never Guess Warren Buffett Loves

Investment Mistakes

Not even the Oracle of Omaha is infallible, and Buffett has endured his fair share of investment mistakes. At least one investment mistake stands out, mainly because Buffett has openly acknowledged how bad it was.

Dexter Shoe Company possessed exactly the features Buffett sought in a company: It had solid management, a valuable brand and competitive edge in the industry. So, in 1993, Buffett acquired Dexter at a cost of $443 million in Berkshire Hathaway stock.

From this promising beginning, Buffett’s investment in Dexter turned south as cheaper overseas labor costs prevented the company from taking off. By 2001, Dexter had gone nowhere, and Buffett pulled the plug, merging it with another Berkshire subsidiary.

Berkshire shareholders lost as much as $3.5 billion from the deal. Looking back on the investment, Buffett said in a 2007 shareholder letter, “To date, Dexter is the worst deal that I’ve made.”

One of Buffett’s biggest mishaps occurred on Oct. 11, when the Dow Jones Industrial average dropped over 800 points due to concerns over rising interest rates. Berkshire Hathaway shares fell nearly 5 percent that day. For Buffett, that translated to a loss of about $4.5 billion in one day, Fortune reported.

Learn: What Happened When Warren Buffett Didn’t Follow His Own Advice?

Warren Buffett Philanthropy

Having learned from his father the importance of giving back to the community, Buffett regularly donates his wealth to charity. He has committed to giving more than 99 percent of his fortune to charity, and has so far given away almost $32 billion, much of it to the Gates Foundation.

Buffett and fellow business magnate Bill Gates launched The Giving Pledge in 2010, asking billionaires to donate half their wealth to charitable causes. This ongoing commitment has been taken up by 183 billionaires from 22 countries as of 2018, including Facebook’s Mark Zuckerberg and Microsoft’s Paul Allen.

The generosity does not stop at one generation. Warren’s son, Peter Buffett, runs the NoVo Foundation with his wife Jennifer. Recently, they made headlines for granting $34 million to nonprofits fighting for causes such as LGBTQ+ rights, racial injustice and immigrant and refugee issues.

It Boils Down to One Word: The Extraordinary Way Warren Buffett Measures Success

Warren Buffett Early Life

Born Aug. 30, 1930, in Omaha, Neb., Buffett is the son of a former U.S. Congressman and “verbally abusive” mother, The Washington Post reported. He showed an impressive knack for numbers at an early age, first buying stock at age 11, and filing taxes at age 13. He was known for his infatuation with statistics and money-making schemes, selling used golf balls, delivering newspapers, and renting pinball machines, among other financial initiatives.

Buffett grew up following the stories of post-Depression gurus like Ben Graham, who was known for demystifying the stock market with publicly accessible data. Some claim this to be the start of Buffett’s own investing philosophy, which the Washington Post has described as “fundamentally cautious.” Nevertheless, today Buffett presides over a massive wealth, and his past has undoubtedly informed him on how and where to invest.

Click to read about Warren Buffett and 14 other celebrities who donate millions to charity.

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GOBankingRates Staff contributed to the reporting for this article.