Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
No. of Recommendations: 0
Has people ever thought why Brk is outperforming SPY recently? As another poster had pointed out earlier, it might be market is pricing in Buffett is retiring and Greg is a better manager for Brk. It might be more return of capital, improvement of efficiency/earnings/cost cutting, and more engagement with wall street/thus analyst coverage. Selling small parts are not ruled out.
No. of Recommendations: 5
Has people ever thought why Brk is outperforming SPY recently?
I would guess that Berkshire was outperforming because investors favor Berkshire when they are in a risk-off, kind of scared, mood.
For a trillion dollar company, Berkshire still doesn't have even close to the liquidity other companies its size have - a lot of Berkshire stock is sitting in taxable accounts not even considering a trade on any given day.
A little bit of incremental flow coupled with some violated covered call strikes can move the price a surprising amount. See 2007 for a recent analog.
I still feel like it's possible we see a strange move to another all time high in Berkshire shares before the general bear market re-asserts itself. At least it wouldn't surprise me. I've done my Berkshire selling for the year.
No. of Recommendations: 1
Liquidity is a good point.
I may be wrong, but i think index calculate weights of each stock based on free float. As WEB donate more shares, free float increases, and passive indexers need to buy more brk.
No. of Recommendations: 11
Has people ever thought why Brk is outperforming SPY recently?
I find it is rarely worthwhile spending much time trying to figure out why a particular stock's price went up or down, or neither. Prices fluctuate.
But if you're looking for a reason behind Berkshire's big rally, recall that BRK tracked the S&P 500 pretty much perfectly in the three years to Feb 21. So there is no reason to search for factors before that date, it was just carried along with the tide. Any reason for a price pop, if any, would start then. And there is only a rise of 7-8% to this big mystery.
True, Berkshire didn't fall with the rest of the market in the April ructions. But then neither did it bounce along with the market.
If forced to guess, I would see that as most likely a flight to safety starting in Feb. Lately followed by lagging during a "risk on" moment because it's so boring.
The price has been pretty steadily lagging the average US large cap since the tariff shenanigans started. No particularly obvious explanation springs to mind, other than that the US dollar and economy have just been set on fire and Berkshire is the most US focused US large cap. Not a great explanation, but you can always find a narrative to fit.
Jim
No. of Recommendations: 1
I think there has been this notion that Warren sold 70% of the AAPL near the top tick and now has all this cash ready to pounce...Interesting that the value hasn't really changed much now the Greg is actually the Lion in charge of the pouncing. It's hard to imagine Warren won't be phoning it in, saying the equivalent of: "Now boy! Go get em"
No. of Recommendations: 15
It's hard to imagine Warren won't be phoning it in, saying the equivalent of: "Now boy! Go get em"
Mr B has a knack for thinking of things that other people aren't thinking about--obvious in hindsight. The sogo shosha play is a prime example. Maybe he'll have a bit more time to just think, perhaps in the tub. So the call may be as simple as, "Hi Greg, have you ever looked at [insert improbable business] before?"
One call like that can make a fortune, if the call is placed to someone with the capital to make it happen.
Jim
No. of Recommendations: 1
I would lean towards improving insurance performance across the whole group.
