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Berkshire Hathaway's 2015 Performance: A Mixed Bag for Warren Buffett's Portfolio

Strategic Insights

— 1 min read

Berkshire Hathaway's portfolio, led by Warren Buffett, has had a mixed year in 2015. While the conglomerate's top investments, such as IBM and Wells Fargo, have performed poorly, other holdings, including Kraft Heinz and Philips 66, have done well. Buffett's fondness for blue chip companies has led to underperformance in some areas, but the Oracle of Omaha's track record remains impressive.

Key Takeaways:

  • Berkshire Hathaway's top stocks, including IBM and Wells Fargo, have underperformed in 2015, with IBM's shares down 12% year-to-date and Wells Fargo's shares down 3%.
  • Buffett's preference for blue chip companies has led to disappointing returns in some areas, including American Express, Procter & Gamble, and Walmart, which are down 17%, 18%, and 30% respectively.
  • Kraft Heinz, created from the merger of Kraft Foods and Heinz, has been a notable exception, rising 10% since its stock began trading in July.
  • Philips 66, one of Berkshire's top holdings, has done well this year, rising 13% due to reduced operational costs associated with lower oil prices.
  • Berkshire Hathaway's own stock price has lagged the market, with A shares down 11% and B shares down 11% this year.
  • The conglomerate has a diversified portfolio, with a range of businesses, including Geico, Burlington Northern Santa Fe, and Fruit of the Loom, accounting for a significant portion of its revenue.
  • Berkshire Hathaway's most recent deal, the $37.2 billion purchase of Precision Castparts in August, is its largest acquisition to date.

Statistics:

  • Berkshire Hathaway's market value per share has increased by 1,826,163% in the past 50 years, representing a compounded annual gain of 21.6%.
  • The S&P 500 has a compounded annual gain of 9.9% over the same period.
  • IBM shares are down 12% year-to-date, while Wells Fargo shares are down 3%.
  • American Express, Procter & Gamble, and Walmart shares are down 17%, 18%, and 30% respectively.
  • Kraft Heinz shares are up 10% since its stock began trading in July.
  • Philips 66 shares are up 13% this year.
  • Berkshire Hathaway's A shares are valued at $200,000, while B shares are valued at $133.

Sources:

  • Paul R. La Monica, "Warren and the Terrible, Horrible, No Good, Very Bad Year," CNNMoney, 2015.
  • Berkshire Hathaway's annual shareholder letter, 2015.

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