Once again, Warren Buffett and Berkshire Hathaway are outperforming the stock market. Apple is one of the main reasons but these 10 other stocks also helped

During the long tech-driven bull market, you’ve probably seen more than one article suggesting Berkshire Hathaway CEO Warren Buffett’s style is no longer valid.

With Buffett leading the conglomerate’s annual meeting on April 30, now is the time to take a fresh look at Berkshire’s performance. The idea that Buffett is obsolete may itself be outdated.

The naysayers had their moments. After all, for the five years through 2019 — before the fiscal and monetary stimulus in response to the pandemic distorting financial markets — Berkshire Hathaway’s Class B stock in BRK.B,
-2.55%
It rose 51%, while the Dow Jones Industrial Average DJIA,
-2.77%
81% back and the benchmark S&P 500 index SPX,
-3.63%
74% returned, with dividends reinvested. (Berkshire Hathaway does not pay a dividend.)

For the five years to 2020 – an amazing year for tech stocks – Berkshire’s Class B shares are up 76%, the Dow is back 98% and the S&P 500 is back 103%.

Now look at a five-year chart showing the returns of the three through April 26, 2022:

set of facts

Berkshire advanced for five years. But one five-year snapshot doesn’t tell the whole story. Below are two tables showing the returns of the three for different periods.

First, total returns as of April 22:

Total Return – 2022 until April 26

Total return – 3 years

Total return – 5 years

Total return – 10 years

Total return – 15 years

Total Return – 20 years

Berkshire Hathaway B class

11%

54%

97%

311%

356%

611%

Dow Jones Industrial Average

-8%

34%

77%

219%

269%

446%

Standard & Poor’s 500

-12%

49%

91%

263%

279%

477%

Source: FactSet

And now the average annual returns for different numbers of years through April 22:

box or indicator

Average return – 3 years

Average return – 5 years

Average return – 10 years

Average return – 15 years

Average return – 20 years

Berkshire Hathaway B class

15.6%

14.6%

15.2%

10.6%

10.3%

DJ . Industrial Medium

7.8%

9.6%

9.7%

6.4%

6.2%

Standard & Poor’s 500

12.4%

11.8%

11.5%

7.1%

7.0%

Source: FactSet

Berkshire’s returns have outperformed those of the Dow and the S&P 500 for all of the periods described above, and strikingly for longer ones.

Getting 2022 well while the broad market is down is, of course, an important part of the story.

One criticism of Buffett’s approach – particularly during periods when Berkshire shares have underperformed the broad market – has been the inability to make new acquisitions “large enough to move the needle”, since Berkshire Hathaway is a large conglomerate. Its market capitalization is around $733 billion.

But Buffett explains the company’s advantages in his annual letters to shareholders, including the “float” of the core insurance business and the high levels of free cash flow that he and his colleagues have emphasized when making acquisitions over the decades.

You can read Buffett’s annual letters here, which are useful for any investor of any style. He also admits to making mistakes, including buying companies that turned out to be “marginal,” he wrote in a 2021 letter published in February.

no one is perfect. But you can see above that what might appear to be a very conservative investment style in a high-tech world can spread well over long periods of good and bad economic cycles. And you should also keep in mind that regardless of new technology, individuals and businesses still need insurance.

Berkshire investment portfolio

Publicly traded companies that invest in the common stock of other companies, but have not incorporated that business into their own financial statements, are required by the Securities and Exchange Commission to report their holdings of stock within 45 days of the end of each fiscal quarter. These files are known as 13F filings. The latest 13F was introduced for Berkshire on February 14 and the property listed as of December 31.

Since then, Berkshire has built 14.6% in Occidental Petroleum Corporations,
-3.40%
Ordinary share.

For the most part, Berkshire Hathaway portfolio information is available as of December 31. So the following lists as of that date. Berkshire is active, adding and trimming different positions in any quarter.

According to Berkshire’s most recent 13F filing, the company owns 42 common shares with a combined market value of $330.9 billion, according to stock price information provided by FactSet. Berkshire’s 5.4% stake in Apple shares was valued at $157.5 billion, or 48% of the total portfolio.

Here are 11 stocks that had a Berkshire holding value of at least $4 billion as of December 31:

company

ribbon

Berkshire Hathaway’s holdings value – December 31, 2021 ($1 million)

Market value of the company – December 31, 2021 ($ million)

Berkshire ownership share

Apple company

AAPL,
-3.66%

$157,529

$2,913,284

5.41%

Bank of America Corp.

BAC,
-3.07%

$44,939

$364,110

12.34%

American Express Company

AXP,
-3.99%

24,804 dollars

$126,717

19.57%

Coca-Cola company

KO,
-2.39%

$23,684

$255,787

9.26%

Kraft Heinz Company

kingdom holding,
-2.25%

$11,690

43,943 dollars

26.60%

Moody’s Corp.

MCO,
-3.10%

$9636

$72,609

13.27%

Verizon Communications Inc.

VZ,
-4.34%

$8253

$218,128

3.78%

US Bancorp

USB,
-2.96%

7101 dollars

$83,289

8.53%

Chevron Corporation.

CVX,
-3.16%

$4,488

$226,214

1.98%

Bank of New York Mellon Corp.

BK,
-3.22%

4,203 dollars

$47,964

8.76%

Davita Company

DVA,
-1.40%

4106 dollars

$11,592

35.42%

Sources: Berkshire Hathaway 13F submission on February 14, 2022; set of facts

Click the indicators to learn more about each company.

You should also read Tomi Kilgore’s detailed guide to the wealth of information for free on the MarketWatch quotes page.

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