Berkshire shares have a small gain for the year as the S&P loses ground.

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FRI, DEC 28, 2018

WARREN BUFFETT WATCH
 

Berkshire beating S&P for the year (but that's not saying much)

 

With one trading day remaining in 2018, Warren Buffett's Berkshire Hathaway is poised to outperform the benchmark S&P 500 for the third straight year.

 

At the close Friday, after a brutal fourth quarter, Berkshire Class A shares are up 1.7% for the year, while the S&P is down 7.0% (not including dividends.)

 

Over the past 10 years, Berkshire has beat the S&P seven times.

 

And going back to 1977, Berkshire has outperformed the benchmark 31 out of 42 years. 

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BUFFETT AROUND THE INTERNET

 
 
  • The Los Angeles Times reports that Berkshire's PacifiCorp utility has asked California regulators for permission to raise rates by 1.4% for 45,000 customers in the northern part of the state. Some of that money would cover $440,000 of costs to upgrade three coal plants in Wyoming and Colorado. State law doesn't allow most utilities to invest in coal, but PacifiCorp is exempted. Even so, the Sierra Club wants regulators to deny the request.  

 

  • PV Magazine says Nevada regulators have approved six solar power plants and three energy storage facilities, allowing for the early retirement of one of the state's two coal plants. Four of the solar plants are for Berkshire's NV Energy utility. 

HIGHLIGHTS FROM THE ARCHIVE

 
 

At the 2016 Berkshire shareholder meeting, Buffett and Charlie Munger answered a question about the company's investments in renewable energy.

 

In his response, which you can see here, Buffett notes that governmental policy is the "major driver" in determining what utilities do.

 

"We’ve had more problems, for example, in bringing in renewables in our western utility, PacifiCorp, because it’s, in effect, regulated by six states — I believe it’s six states — and they don’t necessarily agree on how the cost and benefits should be divided if we put in a bunch of renewables, and we have to follow their instructions."

 

In contrast, "Iowa has just been marvelous about encouraging" wind power, allowing Berkshire's utility in the state to lower rates below its competitor. 

BERKSHIRE STOCK WATCH

 
 
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Berkshire Hathaway Class A shares closed at $302,600 Friday, down 7.2% over the previous four weeks, and up 1.1% from one year ago.

Berkshire Hathaway Class B shares closed at $202.08, down 7.4% over the previous four weeks, and up 1.4% from one year ago.

The benchmark S&P 500 index closed at 2485.74, down 9.9% over the previous four weeks, and down 7.5% from one year ago.

BERKSHIRE'S TOP STOCK HOLDINGS 

 
 
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Berkshire's top stock holdings by market value, based on today's closing prices. The number of shares held is as of September 30, 2018, as disclosed in the company's November 14 13-F SEC filing.

 

The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker.

QUESTIONS OR COMMENTS

 
 

Please send any questions or comments to buffett@cnbc.com.

 

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