Shares of Berkshire Hathaway (BRK.A) (BRK.B) ended the first three months of 2023 little changed, as strong performance in its biggest holding helped offset weakness in financial shares.
Warren Buffett famously doesn’t worry about short-term market moves, unless they present buying opportunities.
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The chairman of Berkshire Hathaway can afford not to worry too much of course.
But it’s a core tenet of his investment philosophy to buy good companies at good valuations and let their managements work to build long-term gains.
Still, with the end of the first quarter of 2023, it’s an interesting exercise to see what’s been working and what hasn’t for Buffett and Berkshire.
Berkshire Underperformed the S&P 500 in the First Quarter
As measured by Berkshire stock itself, Buffett is underperforming.
Shares of the company he chairs ended off 0.4% for the first quarter, versus gains of more than 5% for the S&P 500 index.
This quarter’s performance was hurt by the weakness in bank shares following the collapse of Silicon Valley Bank at the start of March.
Shares US Bancorp (USB) fell 19.24% to $36.05. since Dec 31, 2022. The regional bank makes up a relatively small portion of the Berkshire portfolio. It was the 35th largest holding based on current valuations of stock holdings identified in Berkshire’s last filing with the SEC.
However shares of Bank of America (BAC) also took a hit, falling 14.65% during the quarter. That hurt more, as the stock is currently the second largest holding in Berkshire’s portfolio, with a $28.9 billion valuation as of Friday’s close.
Berkshire’s third largest holding, Chevron Corp. (CVX), also fell, losing 6.2% during the quarter.
Winners Include a Big Tech Name
The best performing stock in the portfolio during the quarter was Floor & Decor Holdings Inc (FND) which rose 35.8% to $98.22 during the period. Floor & Decor is the 33rd largest holding in Berkshire's portfolio.
The second best performer was NU Holdings (NU) , which rose 33.7%.
And, fortunately for Buffett, shares of Apple (AAPL) rose 31.8% during the quarter. Apple is by far the largest holding in Berkshire’s portfolio, according to the most recent SEC fillings, with a valuation of $147.55 billion as of Friday’s close.
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