- Warren Buffett’s Berkshire Hathaway saw its share price hit a five-month high on Wednesday.
- The rally comes after the famous investor’s company made a $ 10 billion acquisition, apparently repurchased more than $ 5 billion of its own shares, and disbursed nearly $ 2.1 billion on Bank shares. of America in 12 days.
- However, Berkshire “B” shares are still down 11% this year, while the S&P 500 is down around 2%.
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Warren Buffett’s Berkshire Hathaway shares hit a five-month high on Wednesday as investors applauded a wave of buying activity from the famous investor.
Berkshire ‘B’ shares closed above $ 203 for the first time since March 6, when fears of the coronavirus pandemic neared their peak. The conglomerate’s market capitalization has now rebounded by more than 25%, from its March 23 low to around $ 494 billion.
However, the title continues to follow the market as a whole. The S&P 500 is down about 2% this year, while Berkshire is down about 11%.
Its underperformance reflects Berkshire’s exposure to sectors such as insurance, utilities and banking, all of which have been hit hard by the coronavirus pandemic.
For example, it owns auto insurer Geico, BNSF Railroad, and billion dollar interests in American Express, Wells Fargo, and JPMorgan.
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The rally in Berkshire’s share price likely reflects the enthusiasm over its recent wave of trading. Buffett was heavily criticized for failing to roll out Berkshire’s $ 137 billion reserve when markets fell earlier this year, but he seems to be finding bargains again.
His company struck a $ 10 billion deal to acquire most of Dominion Energy’s natural gas assets in early July and appears to have repurchased more than $ 5 billion of shares between late April and early July.
In addition, he spent nearly $ 2.1 billion on Bank of America shares for 12 consecutive trading days, bringing his stake in the banking giant to nearly 12% as of August 4.