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Daimler and Berkshire Hathaway Inc. step on the gas

Daimler and Berkshire Hathaway Inc. are adapting their strategy to a changed environment. While Daimler relies on luxury sedans full of innovation and digital technology, the holding company of investment legend Warren Buffett is expanding its portfolio to include shares in Japanese companies.

First things first about Daimler and Berkshire Hathaway Inc.:

  • Daimler relies on profitable series
  • Berkshire Hathaway separates from Wells Fargo and starts shopping in Japan

The new S-Class has been rolling off the assembly line at Daimler’s new plant in Sindelfingen, the so-called “Factory 56”, for almost a week.

The five-meter-long sedan is powered by a twelve-cylinder engine. The Swabians are not only relying on e-mobility, but on customer requirements, according to company circles. And their most profitable series to date. 15 to 20 percent margin is earned here. If the new S-Class hits, the DAX company could still return to profitability in 2020. In the first half of the year, it slipped into the red with 1.7 billion euros.

The Swabian flagship is to be produced exclusively in Sindelfingen. In “Factory 56”, 360 degree networking is possible across the entire value chain – from development and design to suppliers and production to customers, according to Daimler. However, other models could also be produced elsewhere. The prerequisite for this would be that the quantities are sufficient to produce in China, America or at another location. This would correspond to economically rational action.

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The holding of investor legend Warren Buffett Berkshire Hathaway Inc., on the other hand, has rearranged its holdings. The stake in the US bank Wells Fargo was reduced by around 2.5 billion dollars. As a result, Buffett’s stake in the bank has been reduced by more than 40 percent through previous sales. In the first half of 2020, Buffett was a net seller of stocks anyway. Wells Fargo was also in the red in the previous quarter – that was the first quarterly loss since 2008.

Instead, Berkshire Hathaway Inc. has taken major positions in Japanese stocks. Shares in five Japanese trading companies were bought: Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo. These five companies trade below their book value, i.e. their equity capital.

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Source: HSBC

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