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Berkshire Hathaway is one of the largest and most iconic companies in this generation. It is headquartered in Omaha, Nebraska, and operates as a massive holding company that out rightly owns big companies such as GEICO, Dairy Queen, Fruit of the Loom and Duracell.
Plus, it also holds significant minority stakes in companies such as Coca-Cola, American Express and Kraft Heinz Company. The face of the company has always been legendary investor Warren Buffet and one of his iconic deputies, Charlie Munger. But the company has an even more interesting story before Buffet and co.
Berkshire Hathaway was initially focused in the textile industry and young Buffet started investing in the company in 1962 as he sought to take advantage of prices during that time.
He would later own the company outright, and in 1967, his focus drifted to the insurance industry as the textile business became more challenging.
By the late 1970s, he had already acquired a stake in GEICO, a move that was the turning point of his investment journey.
Buffet himself was a student of the fabled investor, Benjamin Graham, and the insurance business model provided him with the capital that would fully exploit his investing talent.
Since insurance customers contribute regular payments with limited claims in the short term, this effectively ensured that the skillful Buffet would have enough positive cash flow to ‘play’ with.
And, Buffet worked his magic!
Berkshire Hathaway has always been publicly traded even pre-Buffet days, but it was in 1996 that Class B shares were introduced as the market price (at the time) of Class A shares were around $30,000, making them prohibitive to the majority of retail investors.
The Class B shares were introduced at an attractive price of $1,000, which allowed investors to get a slice of Berkshire Hathaway without having to go to unit trusts or mutual funds that were designed to track the performance of the company.
Today, Berkshire Hathaway is a company that needs no introduction. As of September 2020, it remains the largest financial services company in the world by revenue and its shares have already recorded major milestones.
In fact, its Class A shares hold the record of the highest ever historical stock price at over $339,000; while its class B shares have been a mainstay top 10 component of the S&P 500 for many years.
The stock is listed on the NYSE, where it trades under the ticker symbol BRK-B. It is included in the Financial Services sector, under the Insurance-Diversified industry.
Berkshire Hathaway B Stock Price History
As mentioned, Class B Berkshire Hathaway shares started at circa $1,000, and since their introduction, there has been 1 stock split: a 50-for-1 that was performed in 2010.
This means that the stock’s split-adjusted introduction price was circa $20. The stock has always seen steady price appreciation, exactly as you would imagine from a Warren Buffet portfolio.
The stock quickly breached the psychological $50 price by May 1998, but it maintained a sideways trend in the subsequent few years.
The effects of the 2008 global financial crisis piled pressure on the stock, and by February 2009, it printed a low of just above $50. It was not until December 2009 that it touched the psychological $100 price.
As economic conditions improved, the stock quickly started a multi-year rally that saw the stock print an all-time high of circa $230 in January 2020.
It would then succumb to the coronavirus inspired economic downturn that saw it print a temporary low of circa $160 in March 2020, before it resumed an assault to above $200 and towards its all-time highs by September 2020.
Berkshire Hathaway famously never pays dividends, with the cash obtained from their respective companies utilised to provide more value to investor holdings.
The Difference Between Class A and Class B Berkshire Hathaway Shares
Apart from the difference in price, Class B shares have already undergone a split, but the company has been categorical that Class A shares will never experience such a scenario.
This also means that Class B shares will always be more flexible and liquid than Class A shares. Additionally, Class A shares can be exchanged for an equivalent amount of Class B shares; but there is no similar exchange privilege for holders of Class B shares.
How to Trade BRK-B Stock
Berkshire Hathaway is one of the most important and successful companies in this generation, which makes the stock one of the most-watched and followed in Wall Street. Still, here are some of the factors which investors should consider when investing in the stock:
- Legislative and Taxation Issues
Berkshire Hathaway has massive holdings in numerous industries, which leaves the company vulnerable to potential legislative hiccups in any of the major industries they are exposed to, such as Insurance and Manufacturing. Additionally, the company serves multiple jurisdictions through its holdings in multiple conglomerates. This also exposes the company to risks, such as changes in taxation policies in different jurisdictions.
- Competitor Performance
erkshire Hathaway’s multiple companies operate in highly competitive markets where factors, such as advancing technologies, may negatively impact the company’s overall revenues and profitability.
- Raw Materials Price Dynamics
Berkshire Hathaway has massive exposure to companies that source raw materials around the world, such as Duracell, Coca-Cola and Fruit of the Loom. Such exposure leaves the company’s revenue and profits massively susceptible to cost uncertainty which may be as a result of forex rates or even regulatory bottlenecks.
- Periodic Earnings Reports
Berkshire Hathaway’s fiscal year runs from January to December, and the company releases quarterly and annual reports that keep investors updated on the performance of the company’s holdings. In these reports, investors usually watch out for the performance of different holdings and important metrics, such as cash available for investment.
Why Trade Berkshire Hathaway with AvaTrade
Berkshire Hathaway stock is available for trading on the AvaTrade MT5 platform as a CFD. Here is why you should trade the stock with us:
- International Regulation
Enjoy the peace of mind of trading with a global, multi-regulated broker. AvaTrade has achieved regulation in 7 various jurisdictions around the world.
- Leveraged Trading
Expand your capital by trading the Berkshire Hathaway stock with a leverage of up to offered by AvaTrade.
- Go Long or Go Short
Short sell the BRK-B stock on AvaTrade (without any restrictions) and trade even when prices are falling.
- Trading Conditions
AvaTrade offers top conditions for trading BRK-B stock including transparent prices, low spreads and fast execution at all times.
- Handy Trading Resources
AvaTrade has numerous handy resources that can help investors get the most out of their trading activities. Apply automated trading strategies and utilise the AvaProtect feature to hedge your trade positions against losses.
Start trading Berkshire Hathaway stock on the AvaTrade trading platforms today!
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Berkshire Hathaway.b Stock FAQ
- Why should I trade Berkshire Hathaway B shares?
Nearly every investor has heard of Warren Buffet, the greatest investor ever to trade the markets. Trading the Berkshire Hathaway B shares is like trading right alongside Warren Buffet, and who wouldn’t want to trade the same stocks as the greatest investor that ever lived? That in itself makes a good case for trading Berkshire Hathaway B shares. And the stock has shown an increase in volatility over the past few years, which makes it more suitable for short-term or even medium-term trading strategies.
- Is Berkshire Hathaway B the best financial services stock for trading?
The financial services sector has the largest number of companies and stocks, making it nearly impossible to choose the best for trading. However, if we had to choose Berkshire Hathaway B would be right at the top of the list. Not only does the stock have good liquidity and price action for traders, it is also the benchmark for Warren Buffet’s trading ideas. That by itself is a strong recommendation for trading the stock, and puts it high up the list in the quest for the best financial services stock for trading.
- What’s the best strategy for trading Berkshire Hathaway B shares?
Like so many of the stocks in the financial services sector Berkshire Hathaway B shares can be traded quite well using technical indicators and tools. When you combine good support and resistance levels with the leverage and ability to go short easily that CFDs offer, you have a powerful combination. Many of the top traders recommend keeping your trading as simple as possible, and using CFDs does that. So, does limiting yourself to no more than 2-3 indicators per chart. Keep your technical signals simple and you’ll have clearer entry and exits points, and will be able to analyse your trades and determine your best strategy more easily.