For the first time ever, the share price of Warren Buffett’s Berkshire Hathaway reached $US500,000 on Monday as the stock continued to outperform the wider market.
The shares touched a peak $US500,023 before falling back to close at $US493,785, up 0.8% on the day which saw Dow finish steady, the Nasdaq lose 2% and the S&P 500 off 0.7%.
For the year so far Berkshire shares are up 9.75%, easily ahead of the S&P 500 (the index Buffett measures his company’s performance against) which has lost 12.4% in value.
Berkshire’s market value is around $US731 billion, ranking sixth in the United States, and Buffett’s 16.2% stake makes him the world’s fifth-richest person at $US119.2 billion.
Berkshire generated a record $US27.46 billion operating profit last year, including gains at Geico car insurance, the BNSF railroad and Berkshire Hathaway Energy. The company controls more than 90 separate businesses.
Even though it doesn’t pay a dividend it is seen as a defensive stock in a market unsettled by events in Ukraine and rising inflation. It was overlooked in the rebound from Covid from March 2020 as investors chased tech stocks, market issues, floats and all sorts of investments powered by cheap money from the Fed.
But since late 2021 when the tech rush started fading and value investment moved back into vogue, the shares have risen strongly. The rebound in Apple shares over the same period has helped. Berkshire is Apple’s biggest single shareholder.
In terms of market value, Berkshire sits behind Apple Inc, Microsoft Corp, Alphabet Inc, Amazon and Tesla Inc.
Berkshire ended 2021 with $US146.7 billion in cash, though it has since invested well over $US5 billion in Occidental Petroleum Corp as oil prices soared, and bought back more of its own shares in January and February. Berkshire bought back $US27.1 billion of its own shares last year which was Buffett’s largest single investment for a second year running.
