Berkshire Hathaway A (BRK.A) concluded yesterday's trading session at an unprecedented high of $551,920, surpassing its prior peak of $544,389 recorded on March 29, 2022. This achievement marks a significant turnaround for Buffett, as it took him a span of 1.5 years to not only recuperate the losses but also exceed them.
If BRK.A price is too high, the Berkshire Hathaway B (BRK.B) shares have made new highs too at $362.58.
It's worth noting that while the S&P 500, Nasdaq 100, and Dow Jones are yet to surpass their historical highs, Buffett has already managed to attain this feat. Kudos to him.
This feat becomes even more noteworthy considering that the majority of the market's gains have been propelled by the tech sector thus far and that Berkshire Hathaway is predominantly characterized by non-tech assets.
One could argue that his substantial stake in Apple played a pivotal role in driving his performance, which holds true. However, Berkshire Hathaway boasts an array of non-tech holdings, including positions in banks, oil and gas, as well as consumer staples. Additionally, a substantial cash reserve and treasury bills have both played their parts in elevating the value of Berkshire Hathaway,.
Firstly, the resurgence of the stock market played a crucial role in reversing Berkshire's fortunes, transforming a $67 billion loss from the previous year into a $33 billion gain. This underscores Buffett's well-known frustration with the wild fluctuations in market prices that impact its earnings. He prefers real fundamental improvements to his businesses rather than the boost from share prices.
Secondly, the cash deposits performed admirably when interest rates were high. Buffett has expressed intentions to acquire more short-term treasury bills, a strategy that could result in a substantial interest payment of approximately $6 billion over a year, assuming a 4% return on its nearly $150 billion cash reserve. The higher interest payments have reduced the drag on performance due to his huge cash pile.
The non-tech stocks are currently the stocks making all-time highs rather than the tech stocks. Within the S&P 500 index, there were 12 stocks that made all-time high yesterday.
Out of these 12 stocks, 6 hail from the industrial sector, 3 are in finance, 2 represent consumer products and services, and 1 is in the construction domain.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
