Berkshire Rises Past $200,000, Extending Buffett’s Record

Berkshire Hathaway Inc. traded above $200,000 for the first time, further validating Chairman Warren Buffett’s decades-long bet on the U.S. economy.

The Class A shares climbed 0.5% to $200,637 at 10:33 a.m. in New York. That’s more than 60 times Seaboard Corp., the agribusiness and transportation company that has the second-highest price among stocks listed on U.S. exchanges.

“It’s a huge milestone,” said Buffett biographer Andrew Kilpatrick. “It proves how far things have come, and you start to wonder, and imagine in your wildest dreams, ‘Where is this thing going?’”

Buffett has shunned the share splits favored by other large companies such as Apple and Wal-Mart Stores, saying a high price discourages short-term speculation. He also rejected a call to institute a dividend and rarely repurchases shares. That’s given him funds to build the company into the fifth- largest in the world by market value through acquisitions and stock picks.

Berkshire reached the latest milestone about seven years and 10 months after the stock first reached $100,000. That’s about a year less than it took to double from $50,000. Omaha, Nebraska-based Berkshire beat the Standard & Poor’s 500 Index in both periods.

In the more recent span, Buffett pushed the company into regulated capital-intensive businesses such as utilities and railroad BNSF, which he acquired in 2010 for more than $26 billion. He also propped up companies such as Goldman Sachs Group Inc. and General Electric Co., which turned to Berkshire for capital in the 2008 financial crisis when other sources of funding dried up.

‘Intrinsic Value’

Berkshire’s workforce climbed to more than 330,000 at the end of 2013. Net income jumped to $19.5 billion last year from $11 billion in 2006.

The stock rallied about 15% since Feb. 28, the day before Berkshire released its annual report, in which Buffett wrote that the company’s actual worth has been rising faster than suggested by metrics such as book value, a measure of assets minus liabilities.

“As I’ve long told you, Berkshire’s intrinsic value far exceeds its book value,” Buffett wrote in his letter. “Moreover, the difference has widened considerably in recent years.” Buffett has said intrinsic value, a subjective metric that accounts for the amount of cash that can be taken out of a business in its lifetime, is a better tool for evaluation.

Berkshire extended its gains after reporting Aug. 1 that net income in the three months ended June 30 climbed 41% to $6.4 billion, a quarterly record for Buffett. Operating profit, which excludes some investment results, beat analysts’ estimates.

Utilities, Railroad