Value stocks are alive: Buffett's company became the sixth in terms of capitalization in S&P 500

Акции стоимости живы: компания Баффетта стала шестой по капитализации в S&P 500

Warren Buffett, the head of the largest non-technology company in the United States, once again proved the effectiveness of long-term investments in reliable stocks..

Railroads vs. Advertising and the Metaverse

2 February Meta Platforms reported a year-on-year drop in profits and slower growth of its main, advertising business. The next day, FB shares fell by 26%, and the market capitalization of the company fell from 910 to 670 billion dollars. As a result, Berkshire Hathaway took the sixth place in the list of the largest US companies with a capitalization of approximately $700 billion..

Since the beginning of 2022, investors have been selling shares of expensive technology companies in anticipation of a rate increase FED. Over this period, the indices S&P 500 and Nasdaq sank on 6 And 10%. None of this worries Warren Buffett and his Berkshire Hathaway., whose shares have grown by 5%.

Berkshire Hathaway is one of two non-tech issuers in the top ten S&P 500. Subsidiaries of this holding operate in traditional segments of the economy. Berkshire Hathaway has six operating areas in total.:

  1. Car and other property insurance.
  2. Rail transportation of coal and other goods.
  3. Production, transmission and storage of electricity.
  4. Manufacture of industrial and consumer goods.
  5. Wholesale distribution of food and beverages.
  6. Services, e.g. fractional ownership of aircraft.

In the third quarter of 2021, which ended 30 September, Berkshire Hathaway's total core business revenue increased by 12%, up to 71 billion dollars.

Capitalization of the largest US companies, according to the data on 7 February 2022, billion dollars

Apple 2813
Microsoft 2294
Alphabet 1893
Amazon 1599
Tesla 927
Berkshire Hathaway 704
Meta Platforms 645
Nvidia 608
Visa 479
UnitedHealth 455


Long distance

Berkshire Hathaway also has a large portfolio of stocks and derivatives..

The third and second places in the portfolio are occupied by shares of American Express and Bank of America.. Shares of shares as a percentage of the total — 8 And 14%. In 2021, the financial sector outperformed the S index&P 500 — 33 against 27%, — and AXP and BAC rose by 35 And 47%.

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And the largest share in the portfolio of Berkshire Hathaway is occupied by Apple shares - 45%. It is a technology company with stable revenue and cash flow., therefore, since the beginning of the year, its papers have sank less than S&P 500: 3 against 6%. For comparison: shares of loss-making Teladoc companies, Intellia, Unity, Spotify and Twilio, which occupy a large share in the ARK Innovation portfolio, since the beginning of this year have lost from 19 to 27%.

As a result, over the past two years, that is, since the beginning of the pandemic, Berkshire outperforms Kathy Wood's flagship fund. And not every investor would dare to bet on such a result..
Buffett's traditional business has suffered due to quarantine restrictions, while Cathy Wood's growth shares rose by tens of percent amid the Fed's soft policy.

So, Gaps between Berkshire and ARKK returns in 2020: 3 against 150%. And that result, to which the managers came to today, once again emphasizes the effectiveness of long-term investments in reliable, but not "hot" companies.

Like Apple, Berkshire Hathaway spends a lot of money to buy back its shares. In the third quarter, the company sent almost $8 billion to buyback.

Акции стоимости живы: компания Баффетта стала шестой по капитализации в S&P 500

Largest positions in the Berkshire Hathaway portfolio, according to the data on 30 September 2021

Apple 44,8%
Bank of America 14,3%
American Express 8,1%
Coca Cola 7,0%
Kraft Heinz 3,2%
US Bancorp 2,5%
Moody’s 2,5%
Verizon 2,4%
WORLD 2,0%
Bank of New York Mellon 1,3%


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