The market value of Berkshire Hathaway, a subsidiary of Warren Buffett, has surpassed $1 trillion for the first time.
As of Wednesday's close Eastern Time, Berkshire Hathaway's Class A stock closed at $696500 per share, an increase of 0.75%; Class B stocks closed at $464.59 per share, an increase of 0.86%.
The latest data shows that the company's total market value has reached 1.001 trillion US dollars, becoming the seventh listed company in the US stock market and the eighth in the world with a market value exceeding 1 trillion US dollars. It is also the first non technology industry US company to join the "trillion dollar club". Seven other companies with market capitalization exceeding trillions of dollars are listed as Apple, Nvidia, Microsoft, Alphabet, Amazon, Middle Eastern oil giant Saudi Aramco, and Meta.
It is worth mentioning that Buffett will celebrate his 94th birthday this Friday.
Source: Companies Market Cap
Analysts point out that this year, due to Berkshire's strong insurance performance and the expected interest rate cut by the Federal Reserve at its September meeting, the market's optimism about the economy continues to strengthen, which has boosted Berkshire's stock price.
According to statistics, Berkshire Hathaway's stock price has risen by about 135% in the past five years, with a cumulative increase of nearly 29% so far this year, while the S&P 500 index has risen by about 18% during the same period.
Steve Check, founder and chief investment officer of Check Capital Management, which manages approximately $2 billion in assets and has Berkshire Hathaway as its top holding, believes that Berkshire is slower but more certain. Making money through traditional methods is more difficult. Berkshire Hathaway's large holdings of Apple Inc. have become a concern, and reducing this risk is a wise move. This eliminates many risks.
Jeff Muscatello, an investor in Berkshire Hathaway and a research analyst at Douglass Winthrop, said that since Buffett managed Berkshire Hathaway in 1965, the company's stock price has risen due to "consistency in their approach" and Buffett's own investment principles.
The first principle is not to lose money, "Muscatello said. The second rule is not to forget the first rule and let the compound interest rule work for a long time
On the evening of August 3rd Beijing time, Berkshire Hathaway released its second quarter report for 2024. According to financial report data, Berkshire Hathaway's revenue for the second quarter of 2024 was $93.653 billion, with market expectations of $91.09 billion, compared to $92.503 billion in the same period last year, a year-on-year increase of 1.24%; Net profit of 30.348 billion US dollars exceeded the market expectation of 17.786 billion US dollars, compared to 35.912 billion US dollars in the same period last year, a year-on-year decrease of 15.49%; In the second quarter, operating revenue increased to $11.598 billion.
At the same time, Berkshire Hathaway's cash reserves reached a record high of $276.9 billion in the second quarter, compared to $189 billion at the end of the previous quarter.
At the 2024 annual shareholders' meeting, Buffett believed that holding a large amount of cash is "quite attractive" compared to the available funds in the stock market and conflicts around the world. We are willing to spend money, but it must be something that (the acquiring or investing company) is doing with minimal risk and can earn us a lot of money
On August 15th, according to the disclosure of the US Securities and Exchange Commission (SEC), Berkshire Hathaway submitted its second quarter holdings report (13F) as of June 30, 2024. According to regulatory documents, as of June 30, 2024, Berkshire Hathaway's total holdings in the US stock market amounted to $279.969 billion, a further decrease of approximately $51.7 billion from $331.68 billion at the end of the first quarter.
In terms of adjusting positions and exchanging shares, Buffett significantly sold his stake in Apple Inc. in the second quarter of this year, with a value of $84.2 billion, a decrease of 51.69% from $174.3 billion at the end of the first quarter; Chevron, the fifth largest holding company, was also reduced by 4.3697 million shares; Paramount Global, one of the three major commercial broadcasting and television companies in the United States, and Snowflake, an American cloud computing company, were cleared with just one click.
On the contrary, Berkshire Hathaway significantly increased its holdings of its sixth largest holdings, Western Petroleum and Anda Insurance, in the second quarter; In addition, Buffett also built his first holdings in the largest cosmetics discount retailer in the United States, ULTRA Beauty Company, and aerospace company Haike Aviation, with market values of $266 million and $185 million, respectively.
According to Buffett's latest move, the latest disclosure from the US Securities and Exchange Commission (SEC) shows that Berkshire Hathaway sold approximately 24.66 million shares of Bank of America common stock again on August 23, 26, and 27, with a total cash flow of approximately $981.9 million.
Since mid July 2024, Berkshire Hathaway has cumulatively reduced its holdings of Bank of America stocks by approximately $5.4 billion, and Buffett's action to reduce its holdings of Bank of America happened to be on the second day of the bank's release of its second quarter financial report. On July 16th, Bank of America released its second quarter financial report, which showed that the company achieved revenue of $51.195 billion and net profit of $13.571 billion during the reporting period. The bank's net interest income decreased to $13.7 billion, which was lower than market expectations.