How Legendary Investor Warren Buffett Made $1.2 Billion Today

Warren Buffett is the world’s seventh richest man with a net worth of $148.4 billion. Before the stock market opened today, he was worth about $1 billion less. While that’s not going to have him leapfrog up the list, no one really minds seeing a billion of dollars added to their wallet in a matter of hours.

Yet in noontime trading, Buffett’s bank account is getting a little heavier because his Berkshire Hathaway (NYSE:BRK-A | BRK-A Price Prediction)(NYSE:BRK-B) is up almost 1%.

A whirlwind higher

Most of Buffett’s wealth is tied to his holding company. As of last year’s proxy statement, the Oracle of Omaha owned 216,637 shares of Berkshire Hathaway’s Class A stock and another 344 shares of its Class B stock.

With the stock rising more than $5,400 per share in morning trading, it means Buffett has added almost $1.2 billion to his net worth. He saw some of those gains evaporate early on, but added them back by lunchtime. It is why the billionaire investor really doesn’t pay attention to the daily fluctuations of stock prices. He has long held that “Price is what you pay, value is what you get.”

Much ado about nothing

There has been nothing to warrant the rise in Berkshire Hathaway’s value other than the stock market as a whole gaining about 120 points. It means both the stock and the index are up about 0.25% and 0.75%, respectively, so far. It’s hardly an earth-shattering development.

BRK-A stock goes for almost $713,000 per share. The Class B shares trade for around $475 per share. The difference between the two, other than the price, is that the Class A shares have more voting power. Owners of BRK-B have 1/10,000th the voting power of their brethren 

Also, the Class B share can be split while the Class A cannot. There has been one split of the stock back in 2010 when BRK-B split 50-for-1. Neither class pays a dividend as Buffett believes he can return value to shareholders better than they can themselves.

Key takeaway

Despite the Oracle’s wallet being about $1 billion heavier today than it was yesterday, Buffett probably hasn’t noticed. He prefers taking a long-term view of a stock and whether it is a good business, and you shouldn’t bother about it either.