Berkshire Hathaway Inc. (BRK.A) Has a Lot of Exposure to US Economy

Warren Buffett‘s Berkshire Hathaway Inc. (NYSE:BRK.A) is one of the greatest holding companies, gathering many successful businesses under its umbrella, such as insurance, textile, building products companies and others. Aside from that, Berkshire owns stakes in many large companies, the value of its equity portfolio topping $105.7 billion mark. In a recent intervention on Bloomberg TV, Noah Buhayar reported about Berkshire Hathaway and its correlation with the total U.S. economy.

Berkshire Hathaway

“The number of companies that fall under the Berkshire umbrella is quite vast these days. There are dozens of them, 70-80, in that ballpark. And many of them are very much tight to the U.S. economy. You think about railroad BNSF, if people are buying more stuff the railroads probably are going to be shipping that. You’ve got a lot of housing-related businesses. There is a brick company, there is a carpet company, there is a paint company, you have a residential real estate brokerage company,” Buhayar said.

In this way, this shows, that the companies that are part of the Berkshire Hathaway Inc. (NYSE:BRK.A)’s holdings, are engaged in the segments that depend of the overall state of the economy, that are correlated with the overall spending of households and other businesses. Berkshire is expected to report its financial results for the second quarter of 2014, later today, probably after the market closes. Buhayar said that investors of Berkshire Hathaway Inc. (NYSE:BRK.A) also agree on the fact that the company has a lot of leverage to the U.S. economy, and they don’t focus on the company’s performance in a particular quarter, but rather have some long-term expectations.

Therefore, Buhayar said that Berkshire should be doing fine, taking into account the overall improvement of the U.S. economy. In addition, Berkshire Hathaway Inc. (NYSE:BRK.A) continues to acquire more businesses to its portfolio of assets, which continues to impact its earnings figures.

Disclosure: none

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