Understanding Berkshire Hathaway’s Stock Price Trends
When you think of a company like Ford, you think of cars. For Apple, it’s iPhones. So, what is Berkshire Hathaway known for making? The surprising answer is almost nothing at all. It’s not a manufacturer in the traditional sense, which is the first key to understanding its famous stock price.
Instead of making one thing, think of Berkshire Hathaway as a giant shopping cart. Warren Buffett, the company’s chairman, doesn’t fill it with groceries; he fills it with entire companies. This business model is called a holding company, and its purpose is to own a collection of other businesses.
Some of the most recognizable brands on the Berkshire Hathaway major holdings list are ones you might use every week. This diverse portfolio includes:
- GEICO (car insurance)
- Duracell (batteries)
- Dairy Queen (fast food and ice cream)
- See’s Candies (chocolates)
- BNSF Railway (one of America’s largest railroads)
This means that owning a single share of Berkshire stock isn’t a bet on a single product. It’s like owning a tiny piece of dozens of different businesses all at once, from the insurance policy on your car to the battery in your remote control.
The Real Reason Berkshire’s Main Stock Is So Expensive
You might be wondering: if the price is so high, why don’t they just lower it? It’s a logical question. Most companies do exactly that when their stock price grows into the thousands, using a common tool to make their shares more affordable.
This tool is called a stock split. Think of a company as a large pizza. Owning one share is like owning one big slice. A stock split is simply the act of cutting that slice in half. Now you have two smaller slices. You haven’t lost any pizza—you own the same total amount—but each individual piece is now cheaper and easier to sell.
Warren Buffett, however, famously refused to split Berkshire Hathaway’s main stock. His investment philosophy was to attract long-term partners, not short-term traders. He believed a high stock price would act as a natural filter, ensuring that shareholders were making a serious, long-term commitment to the business, not just gambling on daily price swings.
As a result, for over 50 years, the price of a single Class A share just kept climbing. This intentional decision is the single biggest reason why Berkshire Hathaway stock is so expensive. But it also created a problem: how could an average person invest alongside Buffett if the “price of admission” was a six-figure number?
Your “Ticket” to Investing with Buffett: Meet the Class B Shares
That exact problem—of pricing out everyday investors—eventually led Berkshire Hathaway to create a solution. In 1996, the company introduced a new, much more affordable “class” of stock. So, while the original shares became known as Class A (BRK.A), this new version was fittingly named Berkshire Hathaway Class B stock (BRK.B).
Think of it this way: if a Class A share is a giant slice of the Berkshire pizza, a Class B share is a much smaller, bite-sized piece of that exact same pizza. You are still investing in the same collection of companies, from GEICO to Dairy Queen, just with a smaller initial ownership stake. These shares quickly earned the nickname “Baby Berks” for their more accessible price tag.
The difference in price is staggering. While a single Class A share continues to trade for hundreds of thousands of dollars, a Class B share is priced so that almost anyone can afford one. This was a deliberate move to allow a new generation of investors to participate in Berkshire’s future without needing a fortune to get started.
How to Buy Berkshire Hathaway Stock (The Easy Way)
So, you’re ready to own a piece of Berkshire. The good news is that buying a Class B share is surprisingly simple and accessible to almost everyone. You don’t need a special connection or a Wall Street advisor; you just need what’s called a brokerage account. Think of it as a bank account, but designed specifically for buying and selling investments like stocks. Many popular and user-friendly companies, such as Fidelity, Charles Schwab, or Robinhood, let you open one in minutes.
Once your account is set up, the process takes just three basic steps:
- Fund your account: Transfer money from your regular bank, just like paying a bill online.
- Find the stock: Use the search bar to look for the stock’s unique stock ticker—its nickname on the stock market. For Berkshire’s Class B shares, that all-important code is BRK.B.
- Place your order: Decide how many shares you want and click “buy.”
That’s it. You’re now a part-owner of Berkshire Hathaway.
Does Berkshire Actually Beat the Market? A 50-Year View
Buying a share is one thing, but has Berkshire Hathaway actually been a good long-term investment? To answer that, we need something to measure it against. For most investors, that yardstick is the S&P 500, an index that simply tracks the performance of 500 of the largest U.S. companies. Think of it as the report card for the overall stock market. So, how has Berkshire stacked up against this average?
The results are staggering. From 1965 through 2023, the S&P 500 delivered a respectable average return of about 10% per year. During that same period, Berkshire Hathaway’s value grew by an average of nearly 20% per year. This is the power of compounded growth, where your earnings start generating their own earnings. It’s like a small snowball rolling down a very long hill; what starts small gradually picks up more snow, getting bigger and faster until its size becomes almost unimaginable.
This phenomenal track record wasn’t built on quick trades or chasing fads. It’s the result of a patient, buy-and-hold strategy focused on owning great businesses for decades. The historical performance of BRK.A is a direct testament to this disciplined approach. Of course, this decades-long success story has been guided by one legendary figure, raising a crucial question for any shareholder.
What Happens After Buffett? The Future of the Company
The incredible success of Berkshire Hathaway is deeply tied to Warren Buffett and his long-time partner, Charlie Munger, who passed away in late 2023. This naturally raises the most common question from investors and onlookers alike: What happens to the company when its legendary leaders are no longer at the helm? Is the magic all tied to one person?
For years, this question has been top of mind for Buffett himself. In response, Berkshire has established a clear succession plan. A hand-picked successor, Greg Abel, is set to take over as CEO, while a team of expert investors will continue to manage the company’s massive portfolio. The plan is designed not just to replace individuals, but to ensure the entire operational and financial engine keeps running smoothly.
Ultimately, the real key to the Berkshire Hathaway future outlook isn’t just a person; it’s the culture. Buffett has spent over 50 years building a company guided by principles of rational thinking, patience, and integrity. This enduring business culture acts as the company’s true north, designed to guide decision-making for decades to come, ensuring the core philosophy outlasts its iconic founders.
From Mystery to Opportunity
That once-baffling number—the price of a single Class A share—is the natural result of an investment philosophy that values long-term partnership above short-term speculation. It’s the story of patience, the power of compounding, and the core idea that owning stock can be a life-long commitment.
More importantly, the creation of Class B shares created an accessible path for anyone who shares that vision. The real benefit of holding Berkshire Hathaway stock comes from participating in this long-term approach to building value. It’s a powerful way to think about how enduring wealth is built, one patient decision at a time.