National Post (National Edition)
Spain’s Ortega loses rich spot to Buffett
SAO PAULO • Warren Buffett is once again the world’s thirdrichest person.
The 82-year-old American investor regained the title after first ceding it to Spanish retail tycoon Amancio Ortega in August. Buoyed by a 49% jump in fourth-quarter profit, shares of Mr. Buffett’s Berkshire Hathaway Inc. have rallied 14% this year. That brings Mr. Buffett’s net worth to US$54.6-billion, according to the Bloomberg billionaires index. He’s up US$6.7-billion year to date.
Mr. Ortega, the 76-year-old founder of the Zara clothing chain, has seen his wealth decline amid fresh concern that Spain’s recession will hurt sales for his Inditex SA holding company. From a record high on Jan. 2, the shares have slumped 7.5%. He’s now worth US$54.3-billion, down US$3.2-billion year to date. Mr. Ortega slipped below Mr. Buffett before trading began in New York Thursday.
“Maybe it ultimately proves the wisdom of Buffett’s approach to riches — buying good solid investment vehicles when they’re at prices that represent good value,” said Bruce McCain, chief investment strategist at the privatebanking unit of KeyCorp in Cleveland. For Mr. Ortega, he said, “retail is a difficult area to be in an economy as troubled as the Spanish one.”
Mr. Buffett built Berkshire Hathaway over almost five decades through takeovers and stock picks. Earlier this month, the company reported net income of US$4.55-billion in the fourth quarter, up from US$3.05-billion in the same period in 2011. Much of the gains stemmed from derivatives bets. The billionaire uses put options to speculate on long-term gains in stock-market indexes in the U.S., Europe and Japan.
European stocks and the euro fell Thursday after data showed an unexpected contraction in German manufacturing and Cyprus’s president worked on a new plan to obtain a European bailout.
Mr. Ortega depends on his home country for a fifth of Inditex’s sales. With Spain’s unemployment rate above 20%, profit growth in the fourth quarter was the slowest in more than a year, according to a March 13 statement from the company. Its reported net income of ¤705-million ($923million) also fell short of the average estimates of analysts.