Warren Buffett Is Beating The Market This Year: CNN

Investors around the world have been trying to adjust their portfolios to contend with big interest rate hikes from the Federal Reserve, European Central Bank, Bank of England and other central banks this year. But Warren Buffett has no reason to be worried, Paul R. La Monica reported for CNN Business.

Photo Insert: Berkshire Hathaway’s operating profit – the measure that both Buffett and Wall Street analysts prefer to use as a gauge of the company’s health – is up nearly 20%, to $24.1 billion, during the first nine months of the year.

It looks like the Oracle of Omaha will have the last laugh this year. Shares of Buffett’s Berkshire Hathaway are up about 5.5% in 2022. The S&P 500 has dropped more than 15%.

Buffett has been helped by the fact that Berkshire has a big stake in oil company Chevron, which is the best stock in the Dow this year with a nearly 50% gain. Berkshire also owns a huge chunk of Occidental Petroleum, which has more than doubled, making it the biggest winner in the S&P 500. Oil stocks have soared thanks to rising crude prices.

Buffett’s affinity for stodgy consumer stocks has also served him well in 2022. Berkshire has big stakes in Coca-Cola and Kraft Heinz, which are each up around 10% this year.

Berkshire Hathaway, a massive conglomerate that owns companies ranging from Geico and the Burlington Northern Santa Fe railroad to consumer brands like Dairy Queen, Fruit of the Loom, and Duracell, has also held up relatively well during a tumultuous year for the economy and markets.

The company posted a net loss through the first three quarters of 2022 due to the drop in value of other top investments such as Apple, Bank of America and other financial stocks, but Berkshire Hathaway’s actual business units are doing just fine.

Berkshire Hathaway’s operating profit – the measure that both Buffett and Wall Street analysts prefer to use as a gauge of the company’s health – is up nearly 20%, to $24.1 billion, during the first nine months of the year.

Can Buffett and Berkshire do it again in 2023? More challenges lie ahead as oil prices sink and inflation peaks. That could hurt Berkshire’s own massive energy and utility businesses. Higher interest rates could also continue to put a dent in Berkshire’s banking investments.

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