Warren Buffett's Berkshire Hathaway beats S&P 500 as investors flee tech stocks
Berkshire Hathaway class B stock jumped 13.6% this year, beating the S&P 500's 7.8% gain. CEO Greg Abel bought back $9.6 billion of stock in the third quarter.
Warren Buffett, the billionaire investor known as the Oracle of Omaha, is back in favor as investors seek shelter from market volatility. Shares of Berkshire Hathaway, the massive conglomerate holding everything from insurance to railroads, are up 13.6% so far this year, outpacing the S&P 500's 7.8% gain according to Fortune.
The rotation comes as Wall Street pulls money out of high-flying tech stocks that drove the artificial intelligence boom. Berkshire's class B stock has soared 14% since Oct. 1 alone, while the broad market index dropped about 4%. The pattern mirrors past market upheavals, such as 2022 when Berkshire gained 4% while the S&P sank 18% during aggressive interest rate hikes by the Fed, the central bank of the United States.
Still, Berkshire's own portfolio faced headwinds, with third-quarter investment gains plunging 46% from a year earlier to $9.4 billion. Top stock holdings continued to feature Apple, American Express, Bank of America, Alphabet, which owns Google, and Coca-Cola. Meanwhile, CEO Greg Abel, who took over from Buffett at the start of the year, accelerated stock buybacks by repurchasing $9.6 billion of Berkshire shares in the third quarter.
Abel also broke a long acquisition drought by agreeing to buy Taylor Morrison, the home builder, for $6.8 billion in July. Traditional businesses under the Berkshire umbrella, including railroad BNSF, Brooks running shoes, See's Candies, and Forest River RVs, delivered strong profits that helped balance out a drop in insurance underwriting.
When old-school rails and shoes start beating silicon chips, it reminds Wall Street that cash flow still beats hype.
