US$200,000 a share: Buffett's Berkshire hits a record high
August 16, 2014, 12:02 am TWN
NEW YORK--Shares in U.S. investment star Warren Buffett's Berkshire Hathaway group topped US$200,000 apiece for the first time Thursday, less than eight years after breaking the US$100,000 barrier.
Already the priciest on U.S. markets, Berkshire shares got even more expensive for investors in a 7.5 percent climb since the company announced record quarterly earnings at the start of August.
At the close of trade Berkshire A shares were up US$3,500, or 1.8 percent, to US$202,850.00.
Buffett has become a legend for the performance of Berkshire, which has a large number of majority and minority investments in everything from small jewelry and furniture retailers to insurance giants Geico and General Re, chemicals group Lubrizol, Coca-Cola, IBM, American Express, Wells Fargo Bank and dozens of others.
The company's long-term gains have made Buffett the world's third wealthiest man, his fortune worth US$65.9 billion, according to Forbes magazine.
After crossing the US$100,000 line in October 2006, Berkshire shares have easily outperformed gauges like the S&P 500 broad-market index, up only 43 percent since then, further burnishing Buffett's star as the “Oracle of Omaha,” the Nebraska city where he lives.
S&P Dow Jones index analyst Howard Silverblatt rued not having bought
Berkshire shares early on.
“Warren has returned 22.6 percent per year compounded since it crossed US$100 in May 1977 — the month I started at S&P,” Silverblatt said.
“I should have indexed my pay check against it — I would be making almost half-a-million dollars a week.”
But the company's future remains under a huge question mark, of who will replace Buffett, 83. He has not said when he will retire but regularly says a solid succession plan has been mapped out.
To make the shares more accessible to small investors, Berkshire created a second class in 1996 when the A shares rose to around US$33,000 each. The B shares, labeled “Baby Berkshires” at the time, went out at just US$1,000.