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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
No. of Recommendations: 0
Any ideas ?
No. of Recommendations: 1
Yes, I sold some Calls early in the day yesterday. The market is making me not look very smart. :)
No. of Recommendations: 22
One theory: Career risk.
Most short term relative price movement in large caps is driven by big portfolio managers, specifically the subset who are active.
They are almost all evaluated on a calendar year basis.
The theme in 2023, especially the latter part of the year, was the Magnificent Seven. If you weren't in those, you were underperforming horribly and soon to be fired.
Throughout the last quarter, the portfolio managers were steadily moving more and more money into them, necessitating selling out of other large positions, probably larger caps.
Three reasons for them to pile in: to chase the trend, to hug the index more closely late in the year to avoid even more career risk, and window dressing to avoid holding any losers at year end.
In the new year, portfolio managers like to start off taking more risk, moving into what they think will actually perform well in the year. Leave hugging the index for late in the year.
In this case it seems they think Berkshire fits the bill...at least for a while, as a relative-to-market rebound play.
Thus endeth the theory : )
It fits the observation that the relative-to-market performance of Berkshire's stock seems to change direction right around year end far more often than chance would suggest.
If it was beating, it starts to lag. And vice versa.
Jim
No. of Recommendations: 0
Why was it so weak in Q4?
Up 1.82% on the B's. SPY up 11.19%.
No. of Recommendations: 6
Why was it so weak in Q4?
My guess is portfolio managers moving money from Berkshire to Big Tech, chasing their rally.
But in the end, the market does what it does for any or no reason. We can only speculate and tell stories.
Jim
No. of Recommendations: 0
Seems odd that brkb would trade so strong with apple soft.
No. of Recommendations: 2
berkshire has always traded more in line with XLF than Apple.
No. of Recommendations: 4
berkshire has always traded more in line with XLF than Apple.
Indeed.
Even though it makes some sense that a share of Berkshire be deemed worth more when a share of Apple is worth more, the reverse seems to be true more often than not.
The *style* of investor in Berkshire is different from the style in Apple, so swings of style seem to have more effect than logical assessments of value.
Jim
No. of Recommendations: 0
Swap BRKB for HSY?
