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Warren Buffett's Berkshire Hathaway Struggles in the Wake of the Coronavirus Pandemic

Strategic Insights

— 1 min read

Berkshire Hathaway, the conglomerate led by Warren Buffett, has a portfolio that is not well-suited for the economic landscape of the coronavirus pandemic. According to "Mad Money" host Jim Cramer, the company's reliance on financial services and its failure to adapt to the shift towards technology has left its stock price flatlining in the second quarter. Meanwhile, the S&P 500 has soared about 20%, its biggest percentage gain since 1998.

Key Takeaways:

  • Berkshire Hathaway's portfolio is weighted towards financial services, which has led to its underperformance in the market.
  • Several of the conglomerate's biggest holdings, including Coca-Cola, Wells Fargo, and Bank of America, have failed to impress during the pandemic.
  • Cramer highlighted several lockdown winners, including Zoom, PayPal, Netflix, Shopify, and Etsy, which are not prominent in Berkshire's portfolio.
  • Buffett's aversion to buying and selling shares means that he is unlikely to shake up the company's portfolio despite its underperformance.
  • Berkshire's biggest holding, Apple, has performed well and reached an all-time high in June.

Statistics:

  • The S&P 500 had a 20% gain in the second quarter, its biggest percentage gain since 1998 (Business Insider).
  • Berkshire Hathaway's stock price flatlined in the second quarter (Business Insider).
  • Several lockdown winners, including Zoom, PayPal, Netflix, Shopify, and Etsy, have seen significant gains in the market (Business Insider).
  • Berkshire Hathaway's portfolio is weighted towards financial services, with key holdings such as Bank of America, American Express, and JPMorgan Chase lagging the market this year (Business Insider).

Sources:

  • Business Insider - https://www.businessinsider.com/warren-buffett-berkshire-hathaway-own-wrong-stocks-pandemic-jim-cramer-2020-7
  • Business Insider - https://www.businessinsider.com/international?r=US&IR=T
  • Business Insider - https://markets.businessinsider.com/stocks/brk-b-stock
  • Business Insider - https://www.businessinsider.com/bond-market-investing-coronavirus-crisis-impact-biggest-lessons-jp-morgan-2020-6?r=US&IR=T?utm_source=markets&utm_medium=ingestm=ingest

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