 |
FRI, SEP 06, 2024
|
|
|
|
Berkshire shares stumble after run of record highs |
A string of record high closes continued into this week for both classes of Berkshire Hathaway's stock.
Unlike last Friday, however, when there was a lot to celebrate, the party soured as this holiday-shortened week came to a close. On Tuesday, the Class A shares ended at $715,910, their eighth consecutive all-time high. They had soared 6.9% since the streak began on August 22. But after a small drop on Wednesday and much bigger declines yesterday and today, more than half of the 8-day price increase has been erased. The A shares finished the week at $689,287, down 3.7% from Tuesday's close, but still up almost 3% overall. |
The more widely held B shares kept climbing the hill for one additional day, notching nine straight record high closes.
The Wednesday finish of $478.57 was up 7.2% from August 22. But they erased 60% of their price gains yesterday and today to close at $459.42, down 4.0% from Wednesday's close, and up 2.9% overall. |
Berkshire's market value, which went above $1 trillion for the first time last week, was a record high $1.03 trillion at Wednesday's close, but is now back to just 12 digits at a bit more than $990 billion. |
Berkshire's sell-off came after a Barron's story was published about an hour before Wednesday's close with the headline, "Berkshire Stock Looks Pricey After Record Run Above $1 Trillion."
Andrew Bary wrote, "Investors continue to pile into Berkshire Hathaway stock even as its valuation rises to multiyear highs and CEO Warren Buffett signals caution on the shares and the overall market." |
Asked to respond to that article on the "Calls of the Day" segment of Thursday's Halftime Report on CNBC, self-described "long-term" Berkshire bull and shareholder Josh Brown of Ritholtz Wealth Management said he agrees with Bary, calling BRK "short-term overbought." He jokingly observed, "This stock is acting like they're doing AI in Omaha."
Brown suggests potential first-time buyers should wait until the stock's price comes down. |
Bank of America stock sales approach $7 billion |
In a filing last night, Berkshire revealed it continued to unload Bank of America shares on Tuesday, Wednesday, and Thursday of this week, extending its selling streak to nine consecutive sessions.
In this latest three-day batch, it received $760 million for 18.7 million shares. That's an average price of $40.54. It has chopped its BAC holding by 16.4% since mid-July, selling 168.9 million shares for $6.97 billion. Average price: $41.25. |
As of yesterday, almost 864 million shares remain, which is roughly 11% of the bank's outstanding shares. At today's close of $38.76, they are valued at $33.5 billion. If Berkshire takes its stake below 10%, around 776 million shares, it will no longer need to promptly report any additional sales.
There is speculation that could be Buffett's intended stopping point, if he doesn't want to eliminate the position altogether.
Barron's Bary suggests another potential target: 700 million.
He notes that in 2017, Berkshire started its BofA stake with 700 million very low-priced shares it bought with warrants that were part of a 2011 investment.
The rest of what was its 1 billion share stake was purchased later at higher prices.
Bary estimates the tax hit on the original 700 million shares would be around $8 per share versus $2 to $3 for the shares added later.
And that could prompt Buffett to keep those 700 million shares, while selling the rest, to avoid paying the higher tax bill. |
BUFFETT AROUND THE INTERNET Some links may require a subscription |
|
|
HIGHLIGHTS FROM THE ARCHIVE |
Buffett on what “understanding” a business means (2000) |
Warren Buffett explains that when he says he doesn’t understand tech stocks, he means he doesn’t understand where the tech industry will be in ten years. |
|
|
BERKSHIRE'S TOP U.S. STOCK HOLDINGS - Sep. 6, 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 |
|
|
© 2024 CNBC LLC. All rights reserved. A property of NBCUniversal. 900 Sylvan Avenue, Englewood Cliffs, NJ 07632
Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes and Market Data and Analysis. Data also provided by THOMSON REUTERS |
|
|
|
