BRK.A Berkshire Hathaway Inc

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 shares are trading at all-time highs near $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 like 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 2.4% since Nov. 8 to 2191.95.

In that period, Berkshire Class A shares have risen 7.9% and B shares are up 7.8%. Both classes of shares fell slightly Friday, with A shares down 0.3% to $239,070 and Class B down 0.5% to $159.39.

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."

Berkshire stock is often compared with a widespread bet on the U.S. economy. 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. 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.

"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 massive 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 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 05, 2016 07:19 ET (12:19 GMT)

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