Giverny Capital, an investment management company, recently published its fourth-quarter investor letter in 2022. A copy of the same can be downloaded here. The model portfolio of the firm appreciated 8.49%, net of fees in the fourth quarter compared to a 7.56% return for the Standard & Poor’s 500 Index. For 2022, the fund delivered a -22.65% return compared to a -18.11% return for the Index. Oil and energy was the strongest sector in the year increased by 65%. In addition, you can check the top 5 holdings of the fund to see its best picks for 2022.
Giverny Capital highlighted stocks like Berkshire Hathaway Inc. (NYSE:BRK-B) in its Q4 2022 investor letter. Headquartered in Omaha, Nebraska, Berkshire Hathaway Inc. (NYSE:BRK-B) is a multinational company that offers insurance, freight rail transportation, and utility businesses. On January 27, 2023, Berkshire Hathaway Inc. (NYSE:BRK-B) stock closed at $309.17 per share. One-month return of Berkshire Hathaway Inc. (NYSE:BRK-B) was 0.09%, and its shares lost 1.23% of their value over the last 52 weeks. Berkshire Hathaway Inc. (NYSE:BRK-B) has a market capitalization of $683.031 billion.
Giverny Capital made the following comment about Berkshire Hathaway Inc. (NYSE:BRK-B) in its Q4 2022 investor letter:
“Our insurers Markel and Berkshire Hathaway Inc. (NYSE:BRK-B) also trade for about 15 times their expected 2023 operating profit after we back out the value of their large portfolios of common stocks. At the top of our performance list, Progressive Corp. rose 26% for the year as it generated outstanding results relative to other large auto insurers. Markel and Berkshire Hathaway rose modestly. The three companies compete in diverse lines of insurance, but they all benefit from rising rates for property coverage after an extended period of weather catastrophes, rising jury awards in lawsuits and inflated loss costs. Our insurers tend to be careful underwriters, so their profitability rises with rates. Our insurers also benefit from rising interest rates because they tend to invest premiums paid by customers into fixed income securities until they pay claims.
Berkshire Hathaway Class B shares constituted our ninth-largest holding at year end. Berkshire remains the not-so-little engine that could. I’ve been telling clients for years that while Berkshire creates great ballast in a portfolio, one shouldn’t expect it to drive outperformance. Founder-CEO Warren Buffett is now 92 years old, many of the assets inside Berkshire are mature and the company must make enormous acquisitions to move the performance dial even a little. Yet Berkshire outperformed the S&P 500 Index by about 20 percentage points last year, and with that now boasts performance over the past 10- and 15-year time periods superior to the S&P 500. That’s outstanding for a giant enterprise and, frankly, beyond my expectations.
In my opinion, Berkshire remains good ballast. It has tremendous asset diversity, giving us exposure to a railroad, a leading utility, varied insurance operations and, of course, Apple. [Berkshire’s giant holding of Apple shares amounts to about 18% of Berkshire’s market capitalization]. It holds enormous cash reserves, giving it buying power whenever quality assets go on sale. And while it did not outperform during the go-go years of super low interest rates, it just demonstrated its ability to shine in a downturn.”
Berkshire Hathaway Inc. (NYSE:BRK-B) holds 11th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 104 hedge fund portfolios held Berkshire Hathaway Inc. (NYSE:BRK-B) at the end of the third quarter which was 109 in the previous quarter.
We discussed Berkshire Hathaway Inc. (NYSE:BRK-B) in another article and shared the list of biggest holdings of Bill Gates’ foundation as of the end of the third quarter 2022. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
