As Berkshire Hathaway tops US$1 trillion, Buffett’s legacy reaches new heights

The market value of Berkshire Hathaway surpassed US$1 trillion on Wednesday, reflecting investor confidence in the conglomerate that Warren Buffett built over nearly six decades into what many consider a proxy for the American economy.

Berkshire joined six other companies, mainly from the technology sector, above US$1 trillion: Apple, Nvidia, Microsoft, Google parent Alphabet, Amazon.com and Facebook parent Meta Platforms.

The valuation is based on Berkshire’s 553,234 class A and 1,325,192,508 class B shares outstanding as of July 23. Berkshire has slowed its stock repurchases this year.

In morning trading, the class A shares traded up 0.7 per cent at US$696,005.94.

Berkshire’s dozens of insurance, energy, manufacturing, retail and service businesses generated US$22.8 billion of profit in the year’s first half, up 26 per cent from a year earlier.

The businesses include Geico car insurance, the BNSF railroad, Berkshire Hathaway Energy, Brooks running shoes, Dairy Queen ice cream, Ginsu knives and the World Book encyclopaedia, among others.

Berkshire also has a huge stock portfolio led by Apple, though it has sold more than half its Apple shares this year.

Stock sales are a major reason Berkshire’s holdings of cash and equivalents soared to US$276.9 billion as of June 30, mostly in US Treasury bills.

Buffett, who turns 94 on August 30, has run Berkshire since 1965.

When Berkshire’s value hit US$1 trillion, its shares had gained more than 5,600,000 per cent since the year Buffett took over.

That’s about 20 per cent annually, nearly double the annualised gain in the Standard & Poor’s 500 including dividends.

Buffett still owns more than 14 per cent of the Omaha, Nebraska-based company, despite having donated more than half his shares to charity since 2006.

As of Tuesday, Buffett’s fortune was about US$144.9 billion, making him the world’s sixth-richest person, Forbes magazine said.

Through Tuesday, Berkshire shares had risen 27 per cent this year, compared with the S&P 500’s 18 per cent gain.