Berkshire Hathaway's shares have experienced a remarkable fourth-quarter rally, with Class A shares gaining 19.1% since October 1 and closing at record highs 11 times, while Class B shares have matched the 19.1% gain with 10 new record closes [1]. This performance stands in sharp contrast to the S&P 500's 1.2% decline during the same period, suggesting investors are viewing Berkshire as a relatively safe haven amid concerns about artificial intelligence stocks and spending [1]. Both share classes advanced 3.9% during the week, outpacing the S&P 500's 2.5% gain—its best week since early August [1]. Year-to-date, Berkshire's B shares are now 7.5 percentage points ahead of the benchmark, and the stock has recovered from post-CEO announcement losses to reach approximately 10% gains since last year's shareholders meeting and around 29% since August lows [1].
Berkshire's quarterly filings reveal significant portfolio adjustments, particularly regarding its Bank of America position. According to the company's third-quarter 10-Q filing, Berkshire has reduced its BAC stake for the ninth consecutive quarter, with holdings declining from just over 1 billion shares valued at $41.1 billion on June 30, 2024, to 483.4 million shares valued at $24.7 billion—representing a 53.2% reduction in share count despite a 28.3% increase in BAC's stock price [1]. Estimates based on the company's reported $372 million reduction in cost basis for banks, insurance, and finance equities and $2.2 billion in pretax gains from equity sales suggest Berkshire may have sold 30 to 40 million BAC shares in the third quarter [1]. In contrast, American Express—one of four stocks new CEO Greg Abel indicated would be held for "decades" to come—remains a core holding with Berkshire maintaining an almost 23% stake [1].
CONCLUSION
Berkshire Hathaway's 19% fourth-quarter rally demonstrates strong investor confidence in the company as a defensive asset amid market uncertainty, significantly outperforming the broader market. The company's continued systematic reduction of its Bank of America position—now in its ninth consecutive quarter—signals a strategic portfolio rebalancing, while its commitment to long-term holdings like American Express reflects management's selective approach to capital allocation under new CEO Greg Abel.