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Why Berkshire Continues to Sag despite Apple’s Strong Returns

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Berkshire Hathaway

So far, Berkshire Hathaway (BRK-B) has fallen 0.34% in 2019. The stock is underperforming the S&P 500 (SPY) by a big margin.

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Apple

Apple (AAPL) is Berkshire Hathaway’s biggest holding, according to recent filings. Berkshire Hathaway holds ~$48 billion of Apple shares. Apple stock has risen almost 24% this year. So far, Apple stock is outperforming the S&P 500. Despite Apple’s strong returns, Berkshire Hathaway stock has sagged.

Banking and financials

Looking at the banking stocks in Berkshire Hathaway’s portfolio, Wells Fargo is flat for the year. Wells Fargo is underperforming the S&P 500. Bank of America has gained 14.5%. While the stock has fared better than Wells Fargo, it’s still underperforming the S&P 500. American Express has gained 28.4% YTD (year-to-date), which is higher than S&P 500’s YTD returns. Assuming that Berkshire Hathaway hasn’t added or sold any shares in the second quarter, it holds almost $25 billion of Bank of America shares and $18.5 billion of Wells Fargo shares. Berkshire Hathaway’s holding in American Express is ~$18.5 billion. Among other leading banking holdings in Berkshire Hathaway’s portfolio, JPMorgan Chase and U.S. Bancorp have slightly underperformed the S&P 500.

Aggregate performance

Looking at the aggregate performance, while some banking holdings in Berkshire Hathaway’s portfolio have underperformed the S&P 500 this year, they don’t appear to be a major drag. Apple, the biggest holding in Berkshire Hathaway’s portfolio, has outperformed markets this year. So, the performance of Berkshire Hathaway’s publicly-traded securities looks largely in line with the broader markets.

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