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(This is the Warren Buffett Watch newsletter, news and analysis on all things Warren Buffett and Berkshire Hathaway. You can sign up here to receive it every Friday evening in your inbox.) Berkshire shares shake the Buffett blues with new all-time highs After almost 18 months, Berkshire Hathaway shares have entirely erased all the ground they lost in the wake of Warren Buffett's surprise announcement at the 2025 shareholders meeting that he would step down as CEO at the end of that year. On Friday, May 2, 2025, the Class A shares closed at $809,350. The Class B shares finished at $539.80. Both were record-high closes. The meeting was the following day, Saturday, May 3. On Monday, May 5, BRK.A dropped 4.9% and BRK.B lost 5.1%. CNBC.com noted a 14% drop in Q1 operating earnings, also announced that Saturday, may have contributed to the declines. It also relayed some reassurance from analysts like Brian Meredith at UBS who predicted the company's culture and strategy would "remain unchanged" under new CEO Greg Abel. "Buffett leaves a company that is less reliant on his investing capabilities, with an array of leading businesses with strong cash flows." Investors, however, were apparently not reassured. As the stock fell, there were fears a "Buffett premium" was evaporating. Three months later, at their lowest closes of the year, BRK.A had lost 14.3% of its value and the more widely held B shares were down almost 15%. Since then, they've rallied by 18%, and on Tuesday this week both classes topped their pre-announcement levels to set fresh all-time closing highs. They were higher still on Thursday, setting new closing highs of $820,500 and $546.97. Friday they lost almost 1% but remain roughly one-half of a percentage point above their highs just before the 2025 meeting. Berkshire's gains have reduced its year-to-date deficit against the benchmark S&P to less than four percentage points. October sprint A majority of the net gain in points between the August 2025 low and now has been racked up this month. Berkshire's B shares have gained almost 9% since the start of October, strongly outperforming the S&P 500's dip of 0.4% and an almost 4.8% drop for the equal-weight NYSE Fang+ index, which tracks 10 megacap tech names, including Meta, NVIDIA, and Alphabet. Investors have been rotating out of high-flying tech and AI stocks in recent weeks amid growing concerns their massive spending on computing infrastructure won't produce the sustained profits they envision. Berkshire, by contrast, is "the ultimate anti-AI play," according to a Barron's headline this week. "With more than $350 billion in cash and equivalents on its balance sheet and close to $50 billion of annual after-tax earnings from a diverse group of businesses, Berkshire arguably is the most defensive megacap stock in the market." And on CNBC's "Morning Call" Monday morning, Adam Patti of VistaShares, which runs an ETF that tracks Berkshire's portfolio, said the market's turn away from its long-running "momentum-driven frenzy" comes at a good time. "The market spent a year pricing Berkshire without Buffett. I think it's finally decided Abel can, in fact, run it" and likes that he's taking advantage of the company's cash. "Berkshire is a coiled spring. When it comes back, it comes back fast and furious." But, as Patti notes, Berkshire isn't completely separated from the AI world. CEO Greg Abel has said providing energy to the growing number of AI data centers is a "significant opportunity for Berkshire and Berkshire Hathaway Energy" as long as rates don't rise for its other customers. And Berkshire has a now $34 billion position in Alphabet, one of AI's biggest players. BUFFETT & BERKSHIRE AROUND THE INTERNET Some links may require a subscription: - Zacks on Yahoo Finance: Berkshire Hathaway B (BRK.B) Increases Despite Market Slip: Here's What You Need to Know HIGHLIGHTS FROM CNBC'S BUFFETT ARCHIVE Berkshire's hidden multi-billion-dollar mistakes (2001) Charlie Munger and Warren Buffett admit their biggest errors are often "mistakes of omission" that don't appear in Berkshire's balance sheet. AUDIENCE MEMBER: Mr. Munger, I know you're fond of evoking humility to promote rational thought. So my question is, what's the most recent business mistake that you've made, Mr. Munger, and why did it occur? (Laughter) WARREN BUFFETT: I'm going to take notes on this one. (Laughter) CHARLIE MUNGER: The mistakes that have been most extreme in Berkshire's history are mistakes of omission. They don't show up in our figures. They show up in opportunity costs. In other words, we have opportunities, we almost do it. In retrospect, we can tell that we were very much mistaken not to do it. In terms of the shareholders, those are the ones in our history that it really cost the most. And very few managements do much thinking or talking about opportunity costs. But Warren, we have blown — WARREN BUFFETT: Billions and billions and billions. I might as well say it. (Laughter) CHARLIE MUNGER: Right, right. And we keep doing it. (Laughter) WARREN BUFFETT: Some might say we're getting better at it. (Laughter) CHARLIE MUNGER: I don't like mentioning the specific companies, because the — you know, we may, in due course, want to buy them again and have an opportunity to do so at our price. But practically everywhere in life, and in corporate life, too, what really costs, in comparison with what easily might have been, are the blown opportunities. I mean, it just — it's an awesome amount of money... WARREN BUFFETT: I might add that when we speak of errors of omission, of which we've had plenty, and some very big ones, we don't mean not buying some stock where we — a friend runs it, or we know the name and it went from one to 100. That doesn't mean anything. It's only — We only regard errors as being things that are within our circle of competence. So if somebody knows how to make money in cocoa beans, or they know how to make money in a software company or anything, and we miss that, that is not an error, as far as we're concerned. What's an error is when it's something we understand, and we stand there and stare at it, and we don't do anything. Or worse yet, what really gets me is when we do something very small with it. We do an eyedropper's worth of it, when we could do it very big. Charlie refers to that elegantly when I do that sort of thing as when I'm sucking my thumb. (Laughter) And there really — I mean, we have been thumbsuckers at times with businesses that we understood well. And it may have been because we started buying, and the price moved up a little, and we waited around hoping we would get more at the price we originally started — there could be a lot of things. But those are huge mistakes. Conventional accounting, of course, does not pick those up at all. But they're in our scorebook. BERKSHIRE STOCK WATCH Four weeks Twelve months BRK.A stock price: $813,595.00 BRK.B stock price: $542.19 BRK.B P/E (TTM): 13.64 Berkshire market capitalization: $1,160,823,061,693 Berkshire Cash as of June 30: $365.5 billion (Down 8.0% from March 31) Excluding Rail Cash and Subtracting T-Bills Payable: $359.2 billion (Down 3.8% from March 31) Berkshire repurchased $4.5 billion of its shares in Q2 2026. BERKSHIRE'S TOP EQUITY HOLDINGS - Oct. 23, 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. Holdings are as of June 30, 2026, as reported in Berkshire Hathaway's 13F filing on August 14, 2026, except for: - Mitsubishi, which is as of April 30, 2026 The full list of holdings and current market values is available from CNBC.com's Berkshire Hathaway Portfolio Tracker. QUESTIONS OR COMMENTS Please send any questions or comments about the newsletter to me at alex.crippen@cnbc.com. (Sorry, but we don't forward questions or comments to Buffett himself.) If you aren't already subscribed to this newsletter, you can sign up here. Also, Buffett's annual letters to shareholders are highly recommended reading. There are collected here on Berkshire's website. -- Alex Crippen, Editor, Warren Buffett Watch
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