“As Buffett has acknowledged in prior annual shareholder letters, Berkshire Hathaway’s sheer size now makes it much more difficult to find companies that are both significantly undervalued and large enough to make a difference to Berkshire’s bottom line,” writes MarketWatch contributor Mark Hulbert.
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Another reason could involve the influence of the portfolio’s co-managers Todd Combs and Ted Weschler, who were hired in 2010 and 2011, respectively. Before that, Buffett managed Berkshire’s portfolio by himself.
“One bequest provides that cash will be delivered to a trustee for my wife’s benefit,” Buffett wrote in the letter. “My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund.”
Buffett’s latest moves
Buffett’s latest letter to shareholders, along with Berkshire Hathaway’s earnings report, is set to come out next Friday (Feb. 23).
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In the meantime, recent US Securities and Exchange Commission filings have provided insight into Buffett’s recent stock moves—for example, Berkshire Hathaway sold off about 1% of its stake in Apple in the last quarter of 2023.
The company now has a 5.9% stake in the tech giant, worth about $176 billion, according to the Wall Street Journal. That is still over half of the company’s more than $300 billion stock portfolio.
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During the same period, Berkshire Hathaway has increased its stake in Chevron by 18% to more than $18 billion, according to Forbes, and also grew its stake in Occidental Petroleum by almost 9% to about $14.5 million.
Its stake in the satellite radio company SiriusXM increased to about $220 million, MarketWatch reported.
Over the course of the past few years, Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) has measurably outperformed the S&P 500 (SNPINDEX: ^GSPC). That's not exactly news, of course.
The S&P 500 weighting system gives a small number of companies major influence, which could have an undue negative effect on the index if one or a few of them run into trouble.
As of the end of the fourth quarter of 2023, 66 hedge funds out of the 933 funds tracked by Insider Monkey had stakes in Occidental Petroleum Corp (NYSE:OXY). In addition to Occidental, Buffett also likes Apple Inc. (NASDAQ:AAPL), Coca-Cola Co (NYSE:KO) and Chevron Corp (NYSE:CVX).
Buffett is also uninterested in gold. In his 2011 letter to shareholders, he noted that gold has two significant shortcomings, “being neither of much use nor procreative.” “If you own one ounce of gold for an eternity, you will still own one ounce at its end.
Ten Year Stock Price Total Return for Berkshire Hathaway is calculated as follows: Last Close Price [ 402.10 ] / Adj Prior Close Price [ 128.49 ] (-) 1 (=) Total Return [ 212.9% ] Prior price dividend adjustment factor is 1.00.
Berkshire Hathaway stock held strong in 2022, making a slight gain compared to a loss of more than 19% for the S&P 500. But it lagged in 2023 rising about 16% compared to the S&P 500's gain of 24%. So far this year it is up around 16%. All-around performance is strong, but not quite ideal, for Berkshire Hathaway stock.
Investing in an S&P 500 fund can instantly diversify your portfolio and is generally considered less risky. S&P 500 index funds or ETFs will track the performance of the S&P 500, which means when the S&P 500 does well, your investment will, too.
The S&P 500's track record is impressive, but the Vanguard Growth ETF has outperformed it. The Vanguard Growth ETF leans heavily toward tech businesses that exhibit faster revenue and earnings gains. No matter what investments you choose, it's always smart to keep a long-term mindset.
Also, the index contains only larger market-cap companies from the U.S.4 In contrast, investors may own small-cap or foreign companies in their portfolios. Using the S&P 500 as a benchmark may be an inaccurate measure of portfolio return for individual investors.
SPDR S&P 500 ETF (SPY) and Berkshire Hathaway Inc.(BRK-B) have volatilities of 3.58% and 3.41%, respectively, indicating that both stocks experience similar levels of price fluctuations. This suggests that the risk associated with both stocks, as measured by volatility, is nearly the same.
The all-time high Berkshire Hathaway stock closing price was 634440.00 on March 28, 2024. The Berkshire Hathaway 52-week high stock price is 647039.00, which is 6.9% above the current share price. The Berkshire Hathaway 52-week low stock price is 482500.00, which is 20.3% below the current share price.
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