29th Aug, 2024: On Wednesday, Berkshire Hathaway’s market value exceeded $1 trillion, showcasing investor confidence in the conglomerate that Warren Buffett has meticulously built over nearly six decades. Many view Berkshire as a barometer for the American economy.
Berkshire joins an elite group of six other companies, primarily from the technology sector, that have surpassed the $1 trillion mark: Apple, Nvidia, Microsoft, Alphabet (Google’s parent company), Amazon, and Meta Platforms (Facebook’s parent company).
In the first half of the year, Berkshire’s diverse portfolio of insurance, energy, manufacturing, retail, and service businesses generated $22.8 billion in profit, marking a 26% increase from the previous year. These businesses include well-known names such as Geico car insurance, BNSF Railway, Berkshire Hathaway Energy, Brooks running shoes, Dairy Queen ice cream, Ginsu knives, and the World Book encyclopedia.
Despite selling more than half of its Apple shares this year, Berkshire maintains a substantial stock portfolio led by Apple. The sale of these stocks significantly contributed to Berkshire’s cash and equivalents soaring to $276.9 billion as of June 30, primarily held in US Treasury bills.
Warren Buffett, who will turn 94 on August 30, has been at the helm of Berkshire since 1965. Under his leadership, Berkshire’s value has skyrocketed, with its shares appreciating by over 5,600,000% since he took over. This equates to an annual growth rate of about 20%, nearly double the annualized gain of the S&P 500, including dividends.
Despite donating more than half of his shares to charity since 2006, Buffett still owns over 14% of the Omaha, Nebraska-based company. As of Tuesday, Forbes estimated Buffett’s fortune at approximately $144.9 billion, making him the world’s sixth-richest person.
This year, Berkshire shares have risen by 27%, outpacing the S&P 500’s 18% gain.