Do you own shares of Berkshire Hathaway? You probably do. And you might know that Warren Buffett (perhaps the most successful investor ever) is the CEO of Berkshire and manages it conservatively. Berkshire owns a broadly diversified collection of more than 100 operating businesses, including the country’s largest railroad, the second-largest electric utility in the US, GEICO, Fruit of the Loom, Pilot Travel Centers, Benjamin Moore, the largest carpet manufacturer, Dairy Queen, Duracell, the largest mobile home manufacturer, Brooks running shoes, and Pampered Chef, to name just a few.

Berkshire is also incredibly conservatively financed. Buffett wrote in the most recent annual report that “Berkshire will always hold a boatload of cash and U.S. Treasury bills.” How much is a boatload? Over a $130 billion on March 31, 2023. That’s the kind of boat I like!

The chart below shows Berkshire Hathaway’s stock price in 2022. It shot up 20% (to Point A) to start the year, only to fall roughly 30% from there (to Point B), and ultimately ended the year up 4% (Point C).

Do you think Berkshire’s businesses changed in value that much over the course of a single year? I don’t! You may question my intelligence – there are good arguments to be made for that – but not Warren Buffett’s. He repurchased shares in 2022. Price and value can be wildly different.

Imagine if you followed Berkshire’s stock price every day. The drop from Point A to Point B would be terrifying. It might have driven you to sell, hold cash, and swear off stocks.

Now, imagine you checked on December 31st each year. You would have seen Berkshire appreciated 4% (Point C), felt comfortable and confident about your financial security, and likely held your position.

Like Buffett said, “All I want to do is hand in a scorecard when I come off the golf course. I don’t want you following me around and watching me shank a three-iron on this hole and leave a putt short on the next one.”

Staring at the stock price does not change it. If it did, some of us would have A LOT more money. Instead of checking stock prices, think about the businesses you own. Are they still selling goods and services people want? If so, your portfolio will be fine. Every day, consumers fill up their gas tanks at Pilot Travel Centers, enjoy a Blizzard at Dairy Queen, and use Duracell batteries. Thinking about the businesses creates a feeling of security. Security is a feeling, not a dollar amount.

If you are concerned, please call us at 772-320-9658. We would love to hear from you and are happy to explain what you own and why. And please remember, I made every investment you are up on and the political party you don’t like caused any to go down!