Berkshire breaks out to record high with fourth-quarter rally reaching 19%

Berkshire Hathaway's red-hot shares are ending a strong week with four consecutive fresh record high closes.

Since the rally began with the start of the fourth quarter on October 1, the Class A shares have closed at record highs 11 times as they soared 19.1%.

The much more widely held B shares closed at new highs just 10 times but are also up 19.1% from their near-term low.

The gains are in sharp contrast to the S&P 500's 1.2% dip as investors appear to be seeing Berkshire as a relatively safe haven amid worries about AI stocks and spending.

Both Berkshire classes were up 3.9% on the week as the S&P advanced by 2.5%, its best week since early August .

Berkshire's B shares are now 7.5 percentage points ahead of the benchmark for the year so far.

After erasing their post-Buffett CEO announcement losses three weeks ago, Berkshire shares are now up almost 10% since last year's shareholders meeting.

They've gained around 29% since last August's lows and are up around 18% year-to-date.

Berkshire Hathaway is due to disclose its quarterly equity portfolio snapshot on Monday when it files its Q3 13F with the SEC.

We won't know for sure until then, but numbers in the company's third quarter 10-Q , released last Saturday , indicate Berkshire continued to reduce its Bank of America stake.

As of June 30, Berkshire reported holding 483.4 million BAC shares valued now at $24.7 billion, it's fifth largest equity position.

On June 30, 2024, before the selling began, Berkshire owned just over 1 billion shares valued at $41.1 billion.

Since then, the number of shares in the portfolio has decreased by 53.2%, not including any Q3 sales, while the stock price has increased by 28.3%.

If there had been no reductions, the position would be worth $52.7 billion.

The belief Berkshire sold more BAC shares in the third quarter is based on a $372 million reduction in the cost basis for equities categorized by the company as "banks, insurance, and finance."

The 10-Q also reports $2.2 billion of pretax gains from equity sales.

Barron's notes Bank of America and American Express are the only financial stocks in the portfolio that have a cost basis low enough to generate a gain like that. Amex is one of the four stocks new CEO Greg Abel indicated would be held for "decades" to come in his February letter to shareholders .

In any case, Berkshire's almost 23% stake in Amex would have required it to quickly disclose any sales.

Based on the numbers in the 10-Q, the warrants Berkshire received as part of a 2011 $5 billion investment in the bank that it used in 2017 to buy 700 million shares at $7.14 each , and BAC's average stock price in the quarter, Barron's estimates 30 to 40 million shares may have been sold.

That would be roughly in line with the 30.2 million shares sold in the second quarter.

The case isn't as good, but Barron's thinks Berkshire may have bought more Alphabet shares in the period. That's based on a $2.3 billion increase in the cost basis for the category that includes Google's parent.

Overall, it looks like it will be a relatively quiet quarter with $2.4 billion in equity purchases and $2.8 billion in sales.

In the first quarter, Berkshire bought $15.9 billion and sold $24.1 billion of equities. In the second quarter, it purchased $23.5 billion and sold $3.7 billion.

All those numbers exclude the company's buybacks of its own stock.

In a term sheet filed early Friday , Berkshire Hathaway says it is selling more than 182 billion yen ($1.1 billion) worth of bonds with maturities between 2029 and 2056 and annual interest rates between 2.6% and 4.6%.

Bloomberg points out the rates, compared to benchmarks, are higher than its previous sale this year.

It quotes a fund manager as saying market sentiment "has become more sensitive," forcing issuers to make their offerings more attractive.

In April , Berkshire sold 272 billion yen ($1.7 billion) of bonds.

Berkshire uses the proceeds from the yen-denominated bonds to protect its ongoing investments in Japanese stocks from currency fluctuations.

Warren Buffett recommends Benjamin Graham's book, " The Intelligent Investor ," and outlines what he considers Graham's three most important ideas.

WARREN BUFFETT : On investment books, if you're asking about that, I would recommend the first two books that Phil Fisher wrote back around 1960, " Common Sense [Stocks] and Uncommon Profits " and the second one ["Paths to Wealth Through Common Stocks"]. They're very good books.

You know, I obviously recommend, first and foremost, [Benjamin Graham's] " The Intelligent Investor ," with chapters eight and 20 are the ones that you really should read.

Two of the — well, all of the important ideas in investing, really, are in that book, because there's only about three ideas. And those — two of them are emphasized in those two chapters...

One is that — to think of yourself — to think of investing as owning a business and not buying something that wiggles around in price.

And the second one is your attitude, which ties in with that, the attitude toward the market, that's covered in chapter eight. And if you have the proper attitude toward market movements, it's an enormous help in securities.

And the final chapter is on the margin of safety, which means, don't try and drive a 9,800-pound truck over a bridge that says it's, you know, "Capacity: 10,000 pounds." But go down the road a little bit and find one that says, "Capacity: 15,000 pounds."

Berkshire Cash as of Sept 30: $377.4 billion (Up 3.3% from June 30)

Excluding Rail Cash and Subtracting T-Bills Payable: $352.3 billion (Down 1.9% from June 30)

Berkshire repurchased $9.6 billion of its shares in Q3 2026.

Berkshire's top holdings of disclosed publicly traded stocks in the U.S. and Japan, by market value, based on the latest closing prices.