For many decades, the naysayers have been calling Berkshire Hathaway stock as being overpriced.
But last Thursday, Berkshire Hathaway Class A shares topped $200,000 per share for the very first time. The stock broke $1000 per share back in 1983.
“Everybody has now been proven wrong on it,” said Andy Kilpatrick, the writer who penned “Of Permanent Value: The Story of Warren Buffett.”
For a long time now, Berkshire Hathaway has had the most expensive stock on the US stock market. Warren Buffett chose to never split Berkshire’s Class A shares, but he did choose to create Class B shares which were much more affordable, and he did so back in 1996. These Class B shares sell for roughly $135 per share at this time.
Like any other stock, Berkshire Hathaway stock has had its ups and downs. The Class A shares first reach the six-figure mark back in October 2006. The stock peaked during December 2007, right at the beginning of the Great Recession. As of March 2009, shares fell as low as $70,050 per share.
This past Thursday, shares reached an all-time high of $202,454.99.
Berkshire Hathaway has come quite far since the Warren Buffett investment partnership started by buying shares in the company in 1962 for seven dollars and eight dollars apiece. At the time, the company was a New England textile business.
After the year 1969, Berkshire Hathaway became the main investing vehicle for Warren Buffett. He used the textile firm revenue to begin buying other companies such as See’s Candy and National Indemnity insurance company.
At this point in the company’s history, they have over 80 subsidiaries, and the companies include railroad, utility and insurance businesses. Each and every one of these companies is performing well. Berkshire Hathaway has more than 330,000 employees. The company has major investments in Wells Fargo, IBM and Coca-Cola, and at the time of this writing, they are sitting on over $55 billion worth of cash for future acquisitions.
Earlier in the month, the company based out of Omaha, Nebraska, posted second-quarter profit at $6.4 billion. This equates to $3889 per Class A share.
“It is indeed a remarkable run,” said Kilpatrick.
Berkshire Hathaway looks like it’s going to continue growing, even if it will grow at a slower rate than in the past because of the huge size of this conglomerate.
Warren Buffett, who is going to turn 84 years old later this month, has amassed a huge fortune worth over $65 billion from his shares in Berkshire Hathaway.