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Warren Buffet's Berkshire Hathaway sails through tariff-fueled selloff largely unscathed
Berkshire Hathaway shares ended up outperforming the broader market, with its Class B stock sliding by 1.4%, making it a haven when compared to the S&P 500.
The stocks of Warren Buffett's Berkshire Hathaway Inc sailed through Thursday's turbulent trading session, falling only slightly, despite indices across the globe plummeting as US President Donald Trump's tariffs kicked in.
Berkshire Hathaway shares ended up outperforming the broader market, with its Class B stock sliding by 1.4%, making it a haven when compared to the S&P 500 which fell 5%, wiping out $2 trillion in market value.
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One of the main reasons for this is due to the insurance sector being one of Berkshire's main sources of earnings.
This sector, in particular, has been relatively insulated from the rest of the market crash, with the KBW Insurance Index falling just 2.7% on Thursday.
Meanwhile, Progressive Corp. which is a direct competitor to Berkshire’s Geico, gaining 2% in fact, and becoming a top performer in the index.
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This is due to insurers having pricing power, thereby increasing costs brought on by tariff-induced inflation in auto-repair costs and homebuilding expenses, which will be passed along to consumers, according to the report which cited Cathy Seifert, an analyst at CFRA.
“Berkshire’s performance has been a rock in the tariff storm,” a Bloomberg report quoted Christopher Davis of Hudson Value Partners as saying. “On days like today, one-third of the market cap in T-Bills is a good feeling.”
In sharp contrast, other major Berkshire holdings such as Bank of America, Chevron, and American Express, fell with over $300 billion wiped off from the market value of Apple alone.
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The falling markets also gave rise to speculation that Buffett could take advantage of the situation to make big purchases since the 94-year old billionaire has in recent quarters, refrained from making major trades and instead focused on building a $334.2 billion cash hoard, according to the report.
