Berkshire Hathaway stock hits record

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Berkshire Hathaway, the conglomerate led by Warren Buffett, saw its stock reach record highs, with Class A shares surpassing $647,039 and Class B shares hitting $430. This surge followed the announcement of Berkshire's record annual operating profit of $96 billion and a cash reserve of $168 billion. Despite these achievements, Buffett cautioned that the era of "eye-popping performance" might be behind the company due to its size and market concentration. However, Berkshire's long-term performance remains impressive, with an 18% year-to-date return, outpacing the S&P 500's 7% gain. Over the last decade, Berkshire's return was 271%, and over the last 40 years, it surged by 50,799%, significantly outperforming the S&P 500's respective gains of 232% and 4,213%1. Buffett's annual letter to investors highlighted the challenges of maintaining high growth rates as Berkshire approaches a $1 trillion market valuation. He emphasized the company's focus on longevity and constancy over seismic deals and skyrocketing performance. Berkshire's significant cash reserves and its investments, particularly in five major Japanese companies, reflect a strategic approach to growth and potential international partnerships2. Despite the initial surge to record highs, Berkshire Hathaway's shares experienced a slight retreat, with Class A shares falling by 0.7% to around $625,000 and Class B shares also declining by 0.7% to approximately $415. This dip occurred even after the company reported a 28% increase in fourth-quarter operating earnings, largely driven by gains in its insurance business. Analysts suggest that the stock's current price already reflects the positive earnings outlook, and Buffett himself has tempered expectations for future performance, indicating that Berkshire is likely to only slightly outperform the average American corporation going forward4. Berkshire Hathaway's annual report revealed a profit of $97 billion for the last year, marking its highest-ever annual profit. This success was attributed to its insurance operations and investment income, which saw a nearly 48% increase. The conglomerate's diverse business portfolio, including significant stakes in Apple, Bank of America, American Express, Coca-Cola, and Chevron, contributes to its status as a bellwether of the American economy7. Buffett also praised Japanese trading houses for their shareholder-friendly policies, noting Berkshire Hathaway's investments in Marubeni Corp., Mitsubishi Corp., Itochu Corp., Mitsui & Co., and Sumitomo Corp. These investments reflect Buffett's appreciation for the governance and performance of these firms, further underscoring Berkshire's strategic approach to international investment8.
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