Is Warren Buffett a Worrywart or Sending a Valuable Signal to High-Yield Dividend Investors?
Warren Buffett is known as the Oracle of Omaha because of the incredible investment success he has achieved with his investment vehicle, Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B). When Buffett says something, investors listen. Right now, Buffett is warning about the increasing risks being faced by regulated utilities, a sector long known as a reliable source of income for investors. Here's what you need to know.
The truth is that Warren Buffett doesn't talk publicly all that often; he prefers to provide his wisdom in written form in Berkshire Hathaway's annual reports. The 2023 report was a doozy for investors who own utilities. Although Berkshire Hathaway is a large and diversified entity, one of its biggest exposures is to electric utilities.
According to Buffett: "[T]he regulatory climate in a few states has raised the specter of zero profitability or even bankruptcy (an actual outcome at California's largest utility and a current threat in Hawaii). In such jurisdictions, it is difficult to project both earnings and asset values in what was once regarded as among the most stable industries in America."
Source Fool.com
Berkshire Hathaway Inc. A Stock
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