WARREN Buffett’s Berkshire Hathaway holding company briefly crossed US$1 trillion in market value on Wednesday (Aug 28), making it the first non-tech firm on Wall Street to pass the milestone and putting it in an exclusive club alongside tech titans like Apple, Nvidia and Microsoft.
Buffett, who turns 94 on Friday, has been chair of Berkshire Hathaway since 1970, transforming it from a small textile company into one of the world’s most valuable firms, and turning him into one of the world’s richest men.
It is the only publicly traded, non-tech firm other than Saudi Arabia’s state-owned oil company, Saudi Aramco, to hit such heady heights.
Many analysts consider the electric vehicle maker Tesla, which previously hit a US$1 trillion market capitalisation, to be a technology company.
Berkshire’s rally this year has outpaced the S&P 500’s gains, with the company off to one of its best annual starts in a decade. It’s gained 30 per cent in 2024, while the market benchmark is up 17 per cent. The company isn’t that far behind the so-called Magnificent Seven: a gauge of the biggest tech stocks is up 34 per cent this year.
“Berkshire has done it the slower, but more sure, way,” said Steve Check, the founder and chief investment officer of Check Capital Management. His firm has about US$2 billion in assets under management, with Berkshire as the largest holding. “It’s harder to make money the old-fashioned way.”
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Berkshire Hathaway’s Class A shares closed up 0.8 per cent, valuing the company at just under US$994 billion.
The Nebraska-based firm’s portfolio spans a vast array of sectors, including insurance, railroads and retail.
Buffett, who has been dubbed the “Sage of Omaha,” popularised a dispassionate, long-term approach to investing that ran counter to the short-term thinking of many market players at the time.
Buffett has been in a selling mood of late, convincing Berkshire Hathaway to dump large quantities of stock in some of its biggest holdings, including Apple and Bank of America, accumulating vast cash reserves, returns on which could be impacted by lower interest rates. Buffett’s cash heap stood at about US$276.9 billion in second-quarter results reported in early August.
The sheer size of the Apple stake had become a worry, Check said, and the move to reduce that exposure was prudent. “It’s taken a lot of that risk off the table.”
The firm has plowed its growing cash pile into government bonds to such an extent that it now owns more short-term US Treasury bills than the Federal Reserve. AFP, BLOOMBERG
