The Berkshire Hathaway Effect: Market Response to Berkshire’s Major Portfolio Change
After the market closed on August 14, 2015, Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) reported its equity holdings of U.S. based companies in its SEC 13F filing for the quarter ending June 30, 2015. This report revealed, for the first time, one major large investment, an increase of about $450 million in Berkshire’s stake in Charter Communications (NASDAQ:CHTR). This represents a 42% increase in Charter to $1.5 billion, which is currently in the process of acquiring Time Warner Cable (NASDAQ:TWC). It is believed that this investment was made by Warren Buffett’s portfolio managers, Ted Weschler and/or Todd Combs.
So how did CHTR perform on its first day of trading (August 17, 2015) after release of Berkshire’s 13F filing?
CHTR rose by 3.98% ($186.98 + $7.16), substantially outperforming the market averages. (The S&P 500 rose 0.52% and the Dow Jones Industrial Average rose 0.39%.)
Thus, the “Berkshire Hathaway Effect” of investors closely following Berkshire’s major transactions continues to be observed as it has in previous quarters and years.
