BRK.A Berkshire Hathaway Inc

Investing in the shares, which are up 8% since the election, is seen as a bet on U.S. growth

By Nicole Friedman 

Warren Buffett was one of Donald Trump's biggest critics during the final months of the presidential campaign. Now he is one of the biggest beneficiaries of a Trump-influenced market rally boosting the value of everything from banks to railroads.

Mr. Buffett's Berkshire Hathaway Inc. posted its best month in six years in November, and its shares are trading at all-time highs at $240,000. The conglomerate's market capitalization, which stood at roughly $20 million when Mr. Buffett acquired the former textile maker in 1965, is hovering just below $400 billion.

Berkshire, which owns traditional businesses such as insurers, railroads, utilities and manufacturers, stands in the echelon of tech giants. It is the fourth-biggest U.S. company by market capitalization, according to FactSet, below Apple Inc., Alphabet Inc. and Microsoft Corp. Mr. Buffett, Berkshire's chairman and biggest shareholder, is the world's third-richest man, according to Forbes.

U.S. stocks have risen since the presidential election on the expectation that Mr. Trump's administration and Republican leadership in Congress will roll back taxes and regulations. The S&P 500 has gained 3% to 2204.71 from Nov. 8 through Monday.

In that period, Berkshire Class A and Class B shares have both risen about 8%. Both classes of shares rose Monday, with A shares up 0.4% to $240,000 and Class B up 0.5% to $160.21.

Mr. Buffett, a Democrat, campaigned for Hillary Clinton and criticized Mr. Trump during the campaign. After Mr. Trump alleged at a presidential debate that Mr. Buffett had taken a "massive" deduction on his taxes, Mr. Buffett publicly released his personal tax information and challenged the Republican candidate to do the same.

Mr. Buffett didn't respond to a request for comment. In April, he told shareholders that Berkshire would "continue to do fine" no matter which candidate was elected president. Following the election, Mr. Buffett told CNN that his investing decisions had been unaffected by the election and that Mr. Trump "deserves everybody's respect."

"The stock market will be higher 10, 20, 30 years from now," Mr. Buffett said in a CNN interview aired Nov. 11. "It would have been with Hillary, and it will be with Trump."

Helping drive Berkshire's stock higher is a broad exposure to the financial industry through its ownership of insurance companies and banks. Notably, J.P. Morgan Chase & Co. and Goldman Sachs Group Inc. are two of the best performers in the Dow Jones Industrial Average since the election.

Berkshire's investment portfolio owns large stakes in financial companies including Wells Fargo & Co. and American Express Co., and the company recently bought shares in four major U.S. airlines. Wells Fargo stock slid this fall due to its sales-practices scandal but has risen alongside other banks since the election.

Financial firms across the market have benefited from a belief that a Trump administration will help fuel a shift to higher interest rates, as well as push for less onerous regulation of the industry, according to analysts.

An investment in Berkshire is also a bet on U.S. growth, given the firm's broad diversification. Berkshire sells electricity, furniture, cars, newspapers and other goods through its subsidiary companies. Its BNSF Railway Co. is one of the biggest in the U.S.

"There is this sense that after this surprise election, under President Trump there will be more rapid growth than there would have been otherwise," said Meyer Shields, managing director at Keefe, Bruyette & Woods. "Berkshire is represented in all elements of the economy."

Mr. Buffett built Berkshire Hathaway, originally a New England textiles company, into a powerhouse over five decades through long-term stock investments and dozens of acquisitions. One of the company's enduring advantages has been its ability to profitably invest "float," the cash given to the company as insurance premiums that doesn't have to be paid out until years later. Berkshire's insurance float stood at $91 billion at the end of the third quarter, according to the company.

Since Mr. Buffett acquired Berkshire in 1965, its per-share market value has posted a compounded annual gain of 21% through 2015. Class A shares are up more than 21% this year.

Some investors may be buying Berkshire shares postelection as a defensive bet because Mr. Buffett's value-oriented investment strategy can outperform during market routs, said Paul Lountzis, president of Lountzis Asset Management LLC, which owns Berkshire shares.

"It's a safe place to put your money. [Berkshire has] a broad diverse set of revenues," Mr. Lountzis said. "If we would go into a very difficult time on the equities side, Berkshire has proven repeatedly that they are a Fort Knox."

Write to Nicole Friedman at nicole.friedman@wsj.com

(END) Dow Jones Newswires

December 06, 2016 02:48 ET (07:48 GMT)

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