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FRI, AUG 30, 2024
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Today is Warren Buffett's 94th birthday. There's a lot to celebrate. |
Berkshire Hathaway is now the eighth company, and only U.S. non-tech, to top $1 trillion in market value.
It crossed the 12-zeroes milestone on Wednesday and stayed above it yesterday and today, ending the week at $1.03 trillion. |
Berkshire is below Meta and above Eli Lilly in the market cap top 10, which is dominated by high-flying tech stocks that have surged in recent years.
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CFRA Research analyst Cathy Seifert tells CNBC.com Berkshire's $1 trillion valuation is "significant at a time when Berkshire represents one of the few remaining conglomerates in existence today." It is also, by far, the oldest U.S. company in the trillion-dollar club.
"Berkshire has done it the slower, but more sure, way," says Steve Check of Check Capital Management on Bloomberg.com. "It’s harder to make money the old-fashioned way." |
In 1965, Buffett, in a fit of pique (it was a $200 billion mistake, he told us in 2010), took control of what was a failing Massachusetts textile mill. Since then, Berkshire Hathaway's share price had a 19.8% compounded annual gain through the end of last year, compared to 10.2% for the S&P.
Oaktree Capital co-founder Howard Marks says on CNBC.com that Buffett's "record is a testament to the power of compounding at a very high rate for a very long period of time, uninterrupted."
He credits "a well-thought-out strategy prosecuted for seven decades with discipline, consistency and unusual insight. Discipline and consistency are essential, but not sufficient. Without the unusual insight, he clearly wouldn’t be the greatest investor in history." |
Seven straight record highs |
Berkshire's entrance to the trillion-dollar club this week is, of course, due to strong gains for its stock.
The Class A and Class B shares have closed at fresh all-time record highs for seven straight sessions and are up 32-33% this year.
While the benchmark S&P has a 4-month winning streak, its YTD gain of 25.1% puts it behind BRK. |
CNBC.com's Yun Li writes it isn't clear exactly what's propelling Berkshire's stock, "Whether it’s a bet on the American economy and Buffett’s sprawling group of businesses poised to benefit if it keeps chugging along or whether they see Berkshire as a [$277 billion as of June 30] cash fortress that will generate steady income in the face of an uncertain macro environment."
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BofA stock sales now total more than $6 billion |
Berkshire has added around $6 billion to that cash pile with a string of Bank of America stock sales since mid-July. According to a new filing tonight, sales of 21.1 million shares on Wednesday, yesterday, and today generated $848.2 million, which is an average price of $40.24. Berkshire has sold BAC shares for six straight sessions. Since it began to reduce its holding on July 17, it has sold shares during 21 of the past 33 sessions. |
In total, Berkshire has cut its BofA holding by 14.5% with the sale of 150.1 million shares for $6.2 billion. That's an average of $41.33 per share. BofA is Berkshire's third largest equity holding, accounting for around 11% of its portfolio. Berkshire remains Bank of America's largest shareholder with a 11.4% stake of 882.7 million shares valued at nearly $36 billion.
As the sales continue, however, it is approaching the Vanguard Group's 639 million shares.
While there are several theories on why Berkshire is selling a stock that Buffett said as recently as last year he didn't want to sell, despite his concerns about the banking sector overall, there's been no explanation from Omaha so far.
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BUFFETT AROUND THE INTERNET Some links may require a subscription
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HIGHLIGHTS FROM THE ARCHIVE |
'To attract money, you should deserve money' (2013) |
Warren Buffett explains how he attracted investors as a young entrepreneur and gives advice on how others can do the same. |
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BERKSHIRE'S TOP U.S. STOCK HOLDINGS - Aug. 30, 2024 |
Berkshire's top holdings of disclosed publicly traded stocks in the U.S., Japan, and Hong Kong, by market value, based on today's closing prices.
Holdings are as of June 30, 2024 as reported in Berkshire Hathaway's 13F filing on August 14, 2024, except for:
The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker. |
Please send any questions or comments about the newsletter to me at alex.crippen@nbcuni.com. (Sorry, but we don't forward questions or comments to Buffett himself.) If you aren't already subscribed to this newsletter, you can sign up here. Also, Buffett's annual letters to shareholders are highly-recommended reading. There are collected here on Berkshire's website.
-- Alex Crippen, Editor, Warren Buffett Watch |
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