Berkshire Hathaway is one of the world’s largest holding companies, underpinned by its successful investments in a string of public and private firms. This includes American Express, Bank of America, Apple and Kraft Heinz Company. Since 1965, shareholders in Berkshire Hathaway have secured an average book value growth of 19% per annum.
The chairperson and CEO of Berkshire Hathaway is Warren E. Buffett, considered one of the world’s most successful investors. Buffett is said to have a personal net wealth of more than $100 billion. Meanwhile, the vice-chair, Charlie Munger, is also a successful investor and operates as Buffett’s assistant.
Berkshire Hathaway has its fingers in plenty of pies, with investments across the insurance, utilities, retail, airline, media, real estate and financial service sectors, along with many more. Buffett and Berkshire Hathaway are renowned for taking a contrarian approach to investments, seeking assets that are well below their true value.
The timeline of the Berkshire Hathaway stock makes for remarkable viewing. The all-time growth of the Berkshire Hathaway share price is approximately 68,408% as of November 2022.
The Berkshire Hathaway share price has increased significantly since the beginning of the Covid-19 pandemic.
It plunged from $340,000 to $271,000 in a matter of weeks between February and March 2020. However, by April 2022, the price of Berkshire Hathaway stock had soared to all-time highs of $529,000. This was due largely to contrarian investments made during the significant uncertainty and volatility yielded by the global pandemic.
Berkshire Hathaway has cultivated such a reputation for its value investments that whenever it buys into a company, it often causes bullish momentum elsewhere in the market. For example, its $4bn investment in Apple’s primary chip manufacturer, TSMC, saw the TSMC share price soar by almost 8% within 24 hours.
Long-term investors have made considerable returns on the Berkshire Hathaway stock through the years. However, as with so many established holding companies, it's hard to know when its value has peaked. Although an average book value increase of 19% is often achieved, there is no guarantee that this will continue, as past performance is not an indicator of future performance.
Investors looking for stocks with healthy dividend yields should also avoid Berkshire Hathaway stock. It chooses not to pay a shareholder dividend and instead uses the funds that would ordinarily be shared with investors to reinvest in profitable markets and tap into new fruitful ones.
If you don’t want to hold shares in the underlying Berkshire Hathaway stock, you could always speculate on its future price instead. Using a contract for difference CFD broker, you can go long (buy) or short (sell) on the Berkshire Hathaway share price. This allows you to profit even if the firm is encountering bearish momentum.
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