Berkshire’s $9 Billion Buyback; Zoom Stock Soars

In the wake of recent volatility, stocks soared on Monday, with all three major indices advancing by 1.9% or more. A cooling off of interest rates is one reason stocks caught fire to begin the week, as traders stopped worrying about the effect of rising rates on the stock market and economy. The Fed has repeatedly committed to taking a dovish approach toward rates for the next several years.

The Dow Jones Industrial Average rose 603 points, or about 2%, to finish at 31,535.

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Berkshire buyback. The world’s most successful long-term investor, Berkshire Hathaway’s (ticker: BRK.B, BRK.A) Warren Buffett, oversaw $9 billion in stock buybacks in the fourth quarter of 2020, nearly doubling the $5 billion in buybacks his company underwent during the entire year of 2019.

The sprawling financial holding company remains flush with hundreds of billions of dollars in cash, so some investors have recently been speculating that Berkshire will begin paying its first-ever regular quarterly dividend to reward shareholders. Instead, it seems Buffett, at least for now, believes reducing the share count is a better use of capital.

Zoom earnings zoom higher. Further cementing itself as one of the stocks of the year in 2020, Zoom Video Communications ( ZM) reported earnings late Monday that blew expectations out of the water. For the full year 2020, the ubiquitous video calling service reported net earnings of nearly $1 billion, which is about 10 times the earnings reported in 2019.

In the fourth quarter, revenue jumped 369% to $882.5 million from $188.3 million the same period a year before. Shares jumped nearly 10% in after-hours trading.

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