$Berkshire Hathaway(BRK.B)$is not a Dow Jones Industrial Average component given its hefty share price that would overwhelm the index if it is included. Nevertheless, it has significant stakes in a number of the Dow components such as $Apple(AAPL)$, $American Express(AXP)$and $Chevron(CVX)$.
Berkshire’s operating earnings rose 20% last quarter from the same period in the prior year to $7.761 billion, though the conglomerate was not spared from recent market turmoils as its investments tumbled into a whopping loss of $10.1 billion in the third quarter.
The investment losses are not surprising in the bear market and as its major holdings such as Apple has succumbed to heavy selling amidst sell-off in the tech sector and recession fears on the back of aggressive rate hikes by the Fed to rein in a surging inflation.
Nevertheless, the Omaha-based company led by renowned investor Warren Buffett took the opportunity to repurchase $1.05 billion of its own shares, accumulating year to date its stock repurchases to $5.25 billion. In his own words: “it’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” What other company is more wonderful to Warren Buffett than his own Berkshire Hathaway?!
Warren Buffett also lives up to his own words to be greedy when others are fearful, as he took advantage of declining equity markets to add more stocks to its $306 billion portfolio, buying a net $3.7 billion and building a now 20.9% stake in Occidental Petroleum.
Unlike the broad S&P 500 market that has fallen 21% year to date, Berkshire has merely dipped less than 5%; a great testimony to Warren Buffett’s investment acumen!
I believe that Berkshire is a great defensive play, that stands to gain from any market recovery as well.
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