Warren Buffett makes little secret of his lack of love for Bitcoin. But the cryptocurrency is outperforming just about all of his Warren Buffett stocks and the S&P 500.
Just one of the 48 U.S.-listed stocks in Berkshire Hathaway portfolio, consumer discretionary RH (RH), topped the price gains of Bitcoin over the past 12 months, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. And that’s based on Berkshire’s just-released holdings though the first quarter, as compared with Grayscale Bitcoin Trust (GBTC), a fund that tracks the price of Bitcoin cryptocurrency.
And longer term, Bitcoin trounces Warren Buffett stocks even more. Not a single one of his current holdings top Grayscale Bitcoin Trust’s 4,751% gain over the past five years.
No wonder Buffett isn’t a fan of Bitcoin. He would have bought it if he was, like ARK Invest’s Cathie Wood did.
Why Bitcoin Isn’t Like Warren Buffett Stocks
So what does Buffett really think of Bitcoin?
The long-time bank investor declined to flat-out slam Bitcoin at Berkshire Hathaway’s annual shareholders meeting earlier this month in Los Angeles. “I’m going to dodge that question,” Buffett said when asked about Bitcoin.
But he didn’t stop Executive Vice Chairman Charles Munger from doing just that. “I should say modestly that I think the whole development (of Bitcoin) is disgusting and contrary to the interest of civilization,” Munger said. And to that, Buffett replied: “I’m all right on that one.”
The fact, though, is Buffett is still looking for a gain of Bitcoin’s magnitude. He panic sold many of his airlines and energy stocks last year just before they took off — missing out on hundreds of millions. And even Berkshire Hathaway’s 103.3% gain in the past five years trails the S&P 500 once you include dividends.
And his top holding by far, S&P 500 technology giant Apple (AAPL), watched its 12-month gain shrink to 58.6%. Berkshire owns more than 887 million shares of Apple or 5% of outstanding shares. Apple stock is more than 40% of Berkshire Hathaway’s portfolio value. But Apple is down 5.9% this year, while Grayscale Bitcoin is up 7.4%.
RH: A Warren Buffett Stock That Tops Bitcoin
Buffett should be glad he owns a big chunk of luxury housewares seller RH. Shares are up 259.2% in the past 12 months. That’s enough to top Grayscale Bitcoin’s 201.3% rise in that time.
Berkshire now owns more than 1.7 million shares of RH. That accounts for more than 8% of shares outstanding. Buffett added slightly, 1%, to the position in the first quarter. But it still only ranks No. 29 in terms of position size in the Berkshire portfolio. And it’s a fairly new position, dating back to the third quarter of 2019.
Longer term, though, not even RH matches Grayscale Bitcoin. Shares of RH are up 1,873% in the past five years, well behind Bitcoin’s gains. And yet, RH is a massive winner this year so far. Shares are up a blistering 40% in 2021 so far, while Grayscale Bitcoin is up just 7%.
Analysts think RH’s adjusted profit per share will boom nearly 18% in the current fiscal year to $20.99. And revenue is seen jumping more than 19% to nearly $3.4 billion.
Could Warren Buffett Stocks Beat Bitcoin in 2021?
Grayscale Bitcoin is topping just about all Warren Buffett stocks in the past 12-months and one year. But 2021 is looking better for Buffett.
So far this year, 29 of Berkshire’s nearly 50 public holdings are topping Grayscale Bitcoin. The No. 1 performer? Financial Wells Fargo (WFC), which Buffett sold all but 1% of Berkshire’s holdings during the first quarter. Wells Fargo is up 55% just this year. That tops RH’s 40% year-to-date gain and also No. 3 Warren Buffett stock winner this year, Bank of America (BAC). Bank of America, which Berkshire still owns nearly 12% of, has risen 39.1% this year.
And there’s the rub. The S&P 500 and markets are now shifting toward “value” stocks, like financials, which Buffett is best known for. Buffett may soon get an opportunity to show why Bitcoin isn’t his thing.
Top Warren Buffett Stocks
Current U.S.-listed Berkshire Hathaway public holdings ranked by 12-month performance
|Company||Symbol||Stock 5-year % ch.||1-year % ch. stock||YTD % ch.||Sector||Composite Rating|
|General Motors||(GM)||81.8%||125.3%||34.2%||Consumer Discretionary||61|
|United Parcel Service||(UPS)||111.2%||122.7%||27.1%||Industrials||98|
|Bank of America||(BAC)||187.0%||83.9%||39.1%||Financials||92|
|Store Capital||(STOR)||31.6%||83.6%||-1.3%||Real Estate||49|
|Grayscale Bitcoin Trust (BTC)*||(GBTC)||4,750.5%||201.3%||7.4%|
Sources: IBD, S&P Global Market Intelligence, * — shown for comparison, not owned by Berkshire Hathaway
Follow Matt Krantz on Twitter @mattkrantz
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