Berkshire Hathaway’s Stock Performance Post-Buffett
Since Warren Buffett announced his departure from his role as CEO of Berkshire Hathaway on January 1, 2023, shares of the company have declined approximately 4%, while the S&P 500 has risen by 2%. Following Buffett’s announcement last May, Berkshire Hathaway’s stock fell by 10%, leading to a stark performance gap of 32 percentage points when compared to the S&P 500’s 22% rally.
Despite the recent stock decline, Berkshire Hathaway reported a 17% year-over-year increase in earnings. The company operates a unique insurance business, allowing them to invest collected premiums, resulting in an investment pool, or “float,” that increased from $88 billion in 2015 to $171 billion as of the last annual letter. Furthermore, shares of Berkshire Class B are currently trading at a price-to-earnings ratio of 15.1, which is 50% lower than the average S&P 500 company.
