According to reports on March 18 by Financial Link (edited by Xiaoxiang), despite nearing the age of 95, the 'Oracle of Omaha' Warren Buffett's legend seems to continue to write its own story this year, amidst a challenging market for USA stocks…

Market data shows that Berkshire Hathaway Inc.'s stock price continued its strong performance over the past six months on Monday, reaching a historic high, significantly outpacing year-to-date trends. $S&P 500 Index (.SPX.US)$ 。

$Berkshire Hathaway-A (BRK.A.US)$ It rose 1.8% on Monday, closing at $784,957. $Berkshire Hathaway-B (BRK.B.US)$ Closed at $523.01, up 1.6%. Both stocks set new closing highs overnight. So far this year, Berkshire Hathaway-A has achieved a growth of 15.3%, firmly holding the position of the eighth highest company by Market Cap in the Global rankings, while the S&P 500 Index has decreased by 3.2% during the same period.

It is worth mentioning that the continuous rise in Berkshire's stock price since the second half of last year occurred without any buybacks by Buffett. The proxy statement released by Berkshire late last Friday indicated that the company did not repurchase any shares between February 10 and March 5, continuing a 'buyback drought' that has persisted since May 2024.

While the lack of stock buybacks is not surprising, it also indicates that Buffett does not consider the company's stock to be undervalued.

It has been proven that the absence of buybacks in recent quarters has not negatively impacted Berkshire's stock price. Since the strong Earnings Reports released by Berkshire at the end of February, which showed a 70% increase in post-tax operating profit, investors have been flocking to the company.

Given that Berkshire currently has over $300 billion in Cash and equivalents as well as strong profitability, investors have recently viewed it as a 'ultimate safe haven' amid the pullback in the USA stock market.

As the largest value stock in the S&P 500 Index, Berkshire seems to be boosted by the market rotation effect in the context of the decline of the Magnificent 7. The entire property and casualty insurance industry has been performing strongly, which is also Bullish for this industry leader.

In last month's annual shareholder letter, Buffett reiterated that Berkshire will continue to adhere to its Private Equity strategy, focusing on quality companies in the USA, including holding companies and partial stakes. He called on shareholders to continue supporting the company's strategy and to actively participate in the upcoming annual shareholder meeting.

Increase shareholding in Japanese trading companies.

News that boosted Berkshire's stock price on Monday also came from its "action speaks louder than words" latest move to further increase its stake in Japan's five major trading companies. Regulatory documents show that Berkshire Hathaway Inc., led by Buffett, has again increased its shares in Japan's five major trading companies:

The Shareholding ratio in Mitsui & Co. increased from 8.09% to 9.82%, the Shareholding ratio in Mitsubishi Corporation increased from 8.31% to 9.67%, the Shareholding ratio in Sumitomo Corporation rose from 8.23% to 9.29%, the Shareholding ratio in Itochu Corporation was adjusted from 7.47% to 8.53%, and the Shareholding ratio in Marubeni Corporation increased from 8.30% to 9.30%.

Since Buffett indicated in his annual letter to shareholders that Berkshire would "increase" its holdings in Japan's five major trading companies "over time," investors have been speculating on his next moves.

Hideyuki Ishiguro, chief strategist at Nomura Asset Management, stated, "This is a signal from Buffett, indicating that he still has confidence in the stocks of these trading companies, which have been in a pullback since last year. This is also a message that the Japanese stock market is still relatively cheap."

The stock prices of these five Japanese trading companies rose over 4% further after the Japanese market opened on Tuesday. As of the end of 2024, the value of Berkshire's shares in these five companies is 23.5 billion USD, nearly twice its cost of 13.8 billion USD. This is considered one of Berkshire's most successful investments in the past ten years.

Analyst Akira Morimoto from Mitsui Sumitomo Trust & Banking Co. wrote in a report that the next focus will be whether Berkshire Hathaway Inc. will have any news about issuing yen bonds again. Berkshire issued its largest yen bond since its first issue in 2019 last October and has been a habitual issuer of yen bonds. Its financing situation is closely monitored by stock market investors, as Buffett typically uses the yen funds raised from the bond market to purchase stocks of Japanese companies.

Continuously outperforming the US Large Cap.

According to statistics, Berkshire's stock price has significantly outperformed the US Large Cap over the past 5, 10, and 20 years.

In the past five years, Berkshire's annualized ROI has reached 22.1%, while the annualized ROI of the S&P 500 Index has been 17.9%. Over the past 10 years, Berkshire's annualized growth rate has been 13.7%, outpacing the S&P 500 Index by 1 percentage point. In the past 20 years, Berkshire's annualized ROI has been 11.4%, also higher than the 10.2% of the S&P 500 Index.

Currently, Berkshire's stock price is more than 1.7 times its book value at the end of 2024 and about 25 times its expected earnings for 2025, whether in terms of PB or forward PE, both are at the high end of the range over the past 10 years.

Even so, investors are clearly confident in entrusting their money to Buffett and are fully confident in his potential successor, Greg Abel, continuing to lead the company.

Editor/jayden