Berkshire Hits $1 Trillion - Buffett's Best Birthday Gift?
$Berkshire Hathaway-A (BRK.A.US)$ crossed $1 trillion in market value for the first time during trading on Tuesday, before Warren Buffett is set to celebrate his 94th birthday on August 30th.
Berkshire Hathaway's impressive performance is partly driven by its investments in key sectors. In energy, it has a large stake in $Occidental Petroleum (OXY.US)$, while in financial services, it holds significant shares in $Chubb Ltd (CB.US)$, $American Express (AXP.US)$, $Visa (V.US)$, $Bank of America (BAC.US)$, and $Citigroup (C.US)$.
The largest increase in holdings by market value was in Occidental Petroleum, where Berkshire added 7.26 million shares, bringing its stake to 5.75% of the portfolio, according to Berkshire Hathaway's Q2 13F filing.
In addition, it's worth noting that Warren Buffett's portfolio saw two new additions in the second quarter: $Ulta Beauty (ULTA.US)$, the largest beauty retailer in the U.S., and $Heico-A (HEI.A.US)$, an aerospace and electronics company.
Berkshire Hathaway's Performance: A Gauge of Economic Health
Investors often regard Berkshire's stock performance as a barometer of the health of the U.S. economy due to its diverse business interests. The stock trades at approximately 23 times analysts' full-year operating profit estimates.
Berkshire's recent gains align with the strong performance of the $iShares S&P 500 Value ETF (IVE.US)$ and the $Ishares Russell 1000 Value Etf (IWD.US)$. This might suggest that value stocks, after breaking out of a sideways trading range in July, may have returned to that range.
Notably, Berkshire is the largest holding in the ETFs tracking the Russell 1000 Value Index and the S&P 500 Value Index.
For most of the past year, a few companies have driven the majority of the S&P 500's gains. FactSet data shows that this trend intensified in June, with the S&P 500 continuing to rise while the average constituent stock declined, raising concerns among strategists and portfolio managers.
Ryan Detrick, chief market strategist at Carson Group, sees the recent easing in inflation data as broadly positive for stocks. He suggests that potential interest rate cuts by the Federal Reserve, possibly as early as September, could trigger a long-anticipated rotation in market leadership without undermining the tech stocks that heavily influence the index.
"It likely will be financials, industrials, and parts of the small-cap and mid-cap space that take the reins," Detrick said. "In other words, it will be a broadening out, which we think is the next phase of this bull market."
Berkshire Hathaway has also benefited from the recent surge in financial stocks over the past two weeks, with the $Financial Select Sector SPDR Fund (XLF.US)$ rising 2.3%.
Given its large insurance operations, Berkshire is categorized as a financial company and is the largest holding in related ETFs. Moreover, Berkshire owns significant stakes in other financial firms, including Bank of America.
Investors are also taking note of Buffett's decision to sell a substantial portion of Apple stock before the recent market downturn, a move that reinforces his reputation as a skilled investor and risk manager. Although Berkshire has slightly lagged behind the S&P 500 over the past 15 years, many still remember how Buffett expertly navigated the dot-com bubble.
Buffett's performance often lags when tech stocks perform well, but when a bubble bursts, his investments frequently outshine the market. The key question is whether he can replicate this success if tech stocks underperform again.
With investors increasingly concerned about tech stock valuations and the possibility of an economic downturn, betting on Buffett seems prudent. This is especially true given Berkshire's substantial cash reserves, which can be used for new investments or to cushion against downside risks.
Symmetrical Triangle Breakout: Key Price Levels to Watch
Since bottoming out between the 50-week and 200-week moving averages in early October last year, Berkshire's stock has been on an upward trajectory. Recently, it broke out of a symmetrical triangle pattern on the chart, suggesting that the uptrend is likely to continue.
When the stock first broke out of the pattern, weekly trading volume surged to its second-highest level since late February, indicating strong buying interest. Additionally, the Relative Strength Index (RSI) is just below the overbought level, further supporting the stock's strong momentum.
To estimate a potential short-term price target, the measured move method can be used. By calculating the distance between the two trendlines of the symmetrical triangle at its widest point and adding that amount to the breakout level, we can project a target price. For instance, adding $50 to $415 gives a target price of $465, which is around Berkshire's market value to the trillion-dollar mark.
Investors seeking key pullback levels should watch the $415 area, where Berkshire Hathaway stock might find buying interest near the top trendline of the symmetrical triangle. A more significant pullback could bring the stock closer to the multi-month uptrend line around $390.
Disclaimer: This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Indexes are unmanaged and cannot be directly invested in. Past performance is no indication of future results. Investing involves risk and the potential to lose principal. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. It is provided without respect to individual investors’ financial sophistication, financial situation, investment objectives, investing time horizon, or risk tolerance. You should consider the appropriateness of this information regarding your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. Moomoo makes no representation or warranty regarding its adequacy, completeness, accuracy, or timeliness for any purpose of the above content. See this link for more information.
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sociable Sheep_7248 : Overvaluated stocks and a shit dollar what an accomplishment
70193418 : Previously, he sold his stocks for 251 and made tens of dollars. When I first entered the stock market in 2020, if I only bought his A-shares and held onto them until now, I would have nearly tripled my investment, and all without needing to monitor the market while sleeping.
I can only shake my head at my shortsightedness back then. 
EZ_money sociable Sheep_7248 : it's all due to inflation that's all this is