Berkshire Hathaway's (BRK-A, BRK-B) annual meeting is this weekend, and along with it comes a few guarantees: Company chief Warren Buffett will sing a few songs, play some paper-tossing games and get the followers of his investing philosophy generally feeling pretty good about life.
Less certain, but a decent bet, has been the fact that the gathering, the "Woodstock of Capitalism," usually coincides with a slight bump higher for the Omaha-based conglomerate's Class A and Class B stock. Going back a decade, the shares have tended to rise at this time of year. In the majority of cases, the two classes have traded in near-lockstep around the gathering, whether they rose or fell.
Buffett champions a very long holding period (forever) as being that which he finds most appealing, but here we're going to do something very un-Oracle-of-Omaha-like and take a look at a much shorter time frame. Specifically, these are those days surrounding the annual meeting, whose highlights arrive each year on a Saturday at the end of April or the start of May. This is the percentage performance of the A and B shares, over the past 10 years, using the combined change in share price of the Friday before the meeting and the Monday after:
Source: Yahoo! Finance
In six of the years, the A shares rose, and the B shares climbed in seven, with 2009 being the lone time they went in opposite directions. All told, the A shares, much more expensive individually at about $160,000, averaged an advance of 0.56%, while the B shares that are accessible to retail investors ($107.30) tacked on 0.76%. A couple of notes: Each class is right at an all-time high now and, as would be expected, they sport an extraordinarily low beta, at 0.25 for the A's and 0.29 for the B's. So don't count on any 11% moves.
The first year on the chart, 2003, stands out as the strongest by far, with 2008 the weakest. Remember, too, that was several months before the market tanked amid the Lehman Brothers collapse.
Long-time shareholders who travel to Nebraska for the Berkshire party/event have done just fine over the years with value master Buffett, who owns insurance firms, candy makers and railroad interests, while favoring stocks such as Coca-Cola (KO) and Procter & Gamble (PG). The last year has paid off, too, as both the Berkshire A and B shares crushed the market, rising 31.1% and 30.8%, respectively. The S&P 500 in that time is up about 14%.
Of course, for the Oracle, that's way too short-term to worry about.
- Investment & Company Information
- Warren Buffett
- Berkshire Hathaway