Buffett’s Berkshire Hathaway tops $500,000 a share; here’s how to buy in
BRK.A shares have outperformed the S&P 500 year to date by a huge margin in a rough year for stocks. Here’s how to invest like Buffett, or with him for less than $500K.
The stock market peaked in November 2021. Moving into 2022, we’ve seen a massive pullback, especially in tech stocks and riskier assets. Investors with portfolios heavily weighted in these stocks may easily have seen all their gains from 2021 wiped out.
But sage investor Warren Buffett’s portfolio has survived and thrived, and this week his Berkshire Hathaway (BRK.A) shares crossed the $500,000 mark for the first time. BRK.A shares are up 12% year to date, while S&P 500 is down 7%.
That suggests a fundamental approach to investing based on value can outperform riskier assets in times of high volatility — a lesson for investors in this rough market.
Here’s why Berkshire keeps rising.
Berkshire Hathaway’s biggest holding is Apple
Despite outperforming tech stocks, Berkshire Hathaway’s largest holding by market value is a tech stock. Berkshire owns more than 5% of Apple (AAPL), which is down 10% year to date. See how Apple has performed longer term in our dedicated guide.
More traditional value stocks in Berkshire Hathaway’s portfolio, in areas like banking, consumer goods and energy, produced enough to keep his stock moving up.
Other top holdings by market value include American Express (AXP), up 13% in 2022; Bank of America (BAC), down 7%; Coca-Cola (KO), up 1.3%; Verizon (VZ), down 3%; and recently acquired Occidental Petroleum (OXY), up a whopping 81%.
Those aren’t all up this year. But they show the diversity by industry of Buffett’s holdings. Not all move up at the same time, but something is usually moving up.
For more about value investing, read our primer.
BRK.A shows solid performance long term
BRK.A has gained 33% in the past 12 months, beating S&P 500’s 14% and Nasdaq 100’s 12%. That’s more than double the market’s performance.
However, BRK.A earned just 102% in the past five years, beating the 90% of S&P 500 but losing to Nasdaq 100, which gained 168% during the same period. Different strategies work in different markets, and value doesn’t always beat growth.
Despite that, BRK.A has proven to be an excellent performer long term. Since 1965, it’s delivered about 20% a year on average.
So can BRK.A keep growing? The same question was probably asked when the stock reached $100,000 and then $200,000 and so on. Recently, UBS gave a buy rating for BRK.A with a one-year target price of $545,400 or 6% higher than the current price — $514,920 as of this writing.
Cheaper ways to buy
All told, Berkshire holds positions in more than 40 companies. That’s hard for the average investor seeking diversification to manage. That’s why BRK.A is one of those stocks sometimes called a one-stock portfolio.
Buffett has said he’ll never split the stock. But he does recognize few can afford that share price. BRK.B was created several years ago as a more accessible way to buy in.
In fact, you have two options to invest with Buffett: buy fractional shares with brokers like Robinhood or IBKR, or buy class B of the stock, BRK.B, which is priced at $343.
Learn more about how to buy BRK.B shares in our dedicated guide.
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