Warren Buffett famously said "Only when the tide goes out do you discover who's been swimming naked." And now it's clear who's not wearing any clothes in the S&P 500.
Thanks to its 4.1% rise this year, Buffett's Berkshire Hathaway retook the spot as the fifth most valuable company in the S&P 500 (up from eighth in January). The far-flung conglomerate managed by the famed investor is now valued at $687.3 billion — an increase of $18 billion this year. Buffett's decades-old company's value raced ahead of three scrappy and younger firms in the S&P 500 that — all of which exceeded it during the boom.
"Overall, Berkshire's financial performance continues to impress and the company's intrinsic value continues to grow," said Whitney Tilson of Empire Financial Research.
Passing Up The Whippersnappers
Specifically, Berkshire Hathaway's market value now outstrips three companies that easily outranked it in January.
That includes Elon Musk's electric vehicle company, Tesla. Pounded by a 44% drop this year, Tesla has lost more than $444 billion in market value. That drops the company's market value to $618.6 billion, making it only the sixth most valuable company in the S&P 500 after Berkshire. In January, it had been fifth, ahead of Berkshire which was eighth.
Also falling from its perch is high-tech computer chip designer Nvidia. The stock's 44% drop this year pushes the company's value down $329 billion to $406.5 billion. So its now only the 11th most valuable S&P 500 down, several notches down from its Berkshire-beating No. 7 position in January.
But the biggest implosion is Mark Zuckerberg's Meta Platforms. Just in January, the company was worth $935.6 billion, making it the sixth most-valuable S&P 500 ahead, easily ahead of Berkshire. But with shares down 66% this year, $636 billion in market value is gone. Now Meta ranks just 20th most valuable in the S&P 500.
Buffett Beating The S&P 500
And perhaps even more noteworthy, during the bear market Buffett has reminded investors why he's still a legend.
Shares of Berkshire Hathaway is back to beating the S&P 500. And not by a little. Shares of his company are topping the S&P 500 in the past one, three, five and 10 years. This year's run is miles ahead of the S&P 500's 16%. And long-term, he looks even better. Berkshire Hathaway stock is up 265.99% in the past 10 years, outpacing the S&P 500 by 43% in that period, says S&P Global Market Intelligence.
A reversal away from Buffett-like dividend and value stocks might finally take hold. And it that's the case, fallen giants like Meta might race back. But in the meantime, Buffett must enjoy watching other investors scrambling to cover themselves until the tide comes in.
Berkshire Hathaway Back At The Top
Warren Buffett's company is now No. 5 in market value in the S&P 500, up from eighth in January
| Market value rank now | Company | Ticker | Market value rank on Jan. 1, 2021 (top 10 at the time) | Market value now ($ trillions) | Stock year-to-date ch. |
|---|---|---|---|---|---|
| 1 | Apple | 1 | $2.4 | -15.7% | |
| 2 | Microsoft | 2 | 1.8 | -26.5 | |
| 3 | Alphabet | 3 | 1.2 | -33.4 | |
| 4 | Amazon.com | 4 | 1.0 | -39.5 | |
| 5 | Berkshire Hathaway | 8 | 0.6 | 4.1 | |
| 6 | Tesla | 5 | 0.6 | -44.4 | |
| 7 | UnitedHealth Group | 9 | 0.5 | 4.0 | |
| 11 | Nvidia | 7 | 0.4 | -44.5 | |
| 12 | JPMorgan Chase | 10 | 0.4 | -14.6 | |
| 20 | Meta Platforms | 6 | 0.3 | -66.4 |
Sources: S&P Global Market Intelligence, IBD
Follow Matt Krantz on Twitter @mattkrantz
