How To Buy Berkshire Hathaway Stock

How To Buy Berkshire Hathaway Stock

Welcome to Trading Brokers step by step guide to buying Berkshire Hathaway stock. Here you will find an easy to understand explanation of trading Berkshire Hathaway stock. This includes how to buy Berkshire Hathaway shares online, what you need to trade Berkshire Hathaway stock and how to open a trading account with a stock broker so that you can buy Berkshire Hathaway stock online today.

Maybe you have heard of buying Berkshire Hathaway stock online or through a friend. Perhaps you are looking to trade and are curious about the different options available to you. Whether you are looking to speculate, invest or just learn more, this guide on how to buy Berkshire Hathaway shares can help you along your journey.

Overview of Berkshire Hathaway

Berkshire Hathaway, a multibillion-dollar holding company based in Omaha, Nebraska, owns many companies, including GEICO, Lubrizol, Dairy Queen, Helzberg Diamonds, BNSF, etc. The company also holds minority stakes in American Express, Bank of America, Barrick Gold, Wells Fargo, The Coca-Cola Company, etc.

Warren Buffet, Chairman & CEO of Berkshire Hathaway, started buying the company’s stock and bought the majority stock in 1964 to take control of the company. When Warren Buffet took the reins of the company, Berkshire Hathaway’s core activity was the manufacturing of textile products. However, he began to transform the company by investing in the insurance business and, in 1967, bought the National Indemnity Company. The company made its second investment in the insurance industry when it bought an equity stake in GEICO, an automobile insurer. By 1985, the company had completely divested its textile business.

Berkshire Hathaway has its investments and holdings in a diversified portfolio of companies in various industries:

  • Insurance Industry (GEICO, Gen re, NRG, Berkshire Hathaway Assurance)
  • Utilities & Energy (Berkshire Hathaway Energy, Northern Powergrid)
  • Retail (Nebraska Furniture Mart, Ben Bridge Jeweler, Helzberg Diamonds, Oriental Trading Company)
  • Media (Business Wire, Omaha World-Herald)
  • Real Estate (HomeServices of America)
  • Clothing (Fruit of the Loom, Garanimals)
  • Equity investments (American Express, Apple, IBM, Coca-Cola, Wells Fargo)

Berkshire Hathaway stock

The company’s class-A shares are priced at above $300,000 per share at the New York Stock Exchange, which are the most expensive shares ever traded on the New York Stock Exchange. Berkshire Hathaway has announced dividends only once in its history, and all of the earnings are reinvested in the company, which is the reason why the stock is valued so high. The company also did not split its stock, which also contributed to the high price of the stock. However, to make the stock affordable for smaller investors, Berkshire Hathaway introduced class-B shares with lower price and fewer voting rights.

Investing in Berkshire Hathaway

Investing in Berkshire Hathaway stock is when you buy Berkshire Hathaway shares to own them outright, usually with a view to holding them for the long term. Investors would usually look to buy Berkshire Hathaway stock in order to try and make a profit when the Berkshire Hathaway stock price increases in value.

Trading Berkshire Hathaway stock

Trading Berkshire Hathaway stock is when a trader speculates on the movement in the Berkshire Hathaway stock price without actually owning the shares in Berkshire Hathaway. Traders tend to buy and sell Berkshire Hathaway stock on a more frequent basis, usually speculating on daily, weekly or monthly price fluctuations.

You can buy and sell Berkshire Hathaway stock online through various methods including spot markets, futures contracts, options contracts, spread bets, CFDs (contracts for differences) and ETFs (exchange-traded funds).

Berkshire Hathaway CFDs

One of the most popular ways to trade Berkshire Hathaway stock is via CFDs (contracts for differences). When trading Berkshire Hathaway CFDs, you do not actually invest in Berkshire Hathaway shares, meaning you are not tied to them. You are only speculating on the rise or fall of the Berkshire Hathaway stock price. A CFD is a financial contract, typically between a broker and a trader, where one party agrees to pay the other the difference in the value of a security, between the opening and closing of the trade.

A CFD trader can go short or long, set stop and limit losses and apply trading scenarios that align with their own personal objectives. Traders would open long (buy) positions, if they think the stock price of Berkshire Hathaway will rise or short (sell) positions if they thought that the Berkshire Hathaway stock price will fall. The difference in price between the entry and exit price is the traders realised profit or loss, excluding any broker commission and fees.

For example, if you think Berkshire Hathaway shares are going to increase in price, you could buy a share CFD on the company. You will exchange the difference in price between when your position is opened and when it is closed, earning a profit if the shares increase in price and making a loss if they decrease in price.

On the contrary, if you think Berkshire Hathaway shares are going to decrease in price, you could sell a share CFD on the company. You will still exchange the difference in price between when your position is opened and when it is closed, earning a profit if the shares decrease in price and making a loss if they increase in price.

Berkshire Hathaway futures

Futures contracts are an agreement to buy or sell a specified asset at a certain date and price. Berkshire Hathaway investors can use futures trading to speculate on the price movement of Berkshire Hathaway stock in order to try and make a profit. Traders would look to go long (buy) a futures contract if they believe the price will rise or short (sell) a futures contract if they believe the price will fall. The difference in price between the price at the start and expiry date of the futures contract is the profit or loss from the contract.

Berkshire Hathaway spread betting

Spread betting is a financial derivative that enables traders to speculate on Berkshire Hathaway stock falling or rising without taking ownership of the underlying asset. If the trader makes a correct prediction and the asset does move in that direction, they could make a profit, minus any broker fees. On the other hand, if the price moves against their prediction, they would incur a loss.

Financial spread betting is similar in ways to CFD trading except that you are betting a fixed amount per point on the Berkshire Hathaway stock price movement (either up or down) and then pay or receive the difference between the opening and closing price of the bet.

Berkshire Hathaway options

Berkshire Hathaway options are financial instruments that are derivatives based on the value of Berkshire Hathaway’s stock. Traders usually enter into calls when they expect the price of the underlying asset to increase, and puts when they expect the price to decrease. Option contracts come with an expiration date before which the holder needs to exercise their option to buy or sell an underlying asset at an agreed-upon price. The stated price on an option is known as the strike price.

Buyers can choose to exercise their calls and puts or not whereas sellers are obligated according to the buyer decision. Therefore, the sellers (writers) can be exposed to more risk than buyers whose losses can be limited to the premium paid for the contract in the instance they do not exercise the contract. On the other hand, sellers could lose more depending on the Berkshire Hathaway market price.

Berkshire Hathaway ETFs

Exchange Traded Funds (ETFs) enable traders to invest in a basket of securities that trade intraday like individual stocks on an exchange, and are typically designed to track the performance of an existing market or group of markets.

Each ETF is usually focused on a specific sector, asset class, or category. ETFs can be commonly used to help diversify an investment portfolio and create a mini-portfolio, or, for the active trader, they can be used to try and take advantage of price movements.

Berkshire Hathaway is included in various ETF’s with shares in the U.S. ETF market. Traders who are interested in trading other companies alongside Berkshire Hathaway, may consider ETFs.

Where to buy Berkshire Hathaway stock?

Stock trades are processed via a stock exchange, where a stock broker represents each investor. The majority of investors will nowadays use an online stock broker to buy and sell stocks through a stock trading platform which will enable them to connect to the stock exchange. You can see a selection of our best stock brokers below with whom you can open an account to trade stocks online.

Broker
Rating
Regulated
Min. Deposit
Founded
Max. Leverage
1.

ASIC, BVI, CBI, FFAJ, JFSA, FSCA, IIROC, ADGM FRSA

Min $100 Deposit

2006

1:400

Review Trade! Trade!
Terms & conditions apply
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
2.

FCA, CFTC, NFA, BaFin, FINMA, ASIC, FMA, MAS, FSA, FSCA, DFSA, JFSA, METI, MAFF

Min $250 Deposit

1974

1:200

Review Trade! Trade!
Terms & conditions apply
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
3.

ASIC, FCA, DFSA, SCB, CySEC, BaFin, CMA

Min $200 Deposit

2010

1:30

Review Trade! Trade!
Terms & conditions apply
CFDs and FX are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
4.

ASIC, CySEC, IFSC, DFSA

Min $5 Deposit

2009

1:888

Review Trade! Trade!
Terms & conditions apply
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78.28% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
5.

ASIC, CySEC, FSA, SCB

Min $200 Deposit

2007

1:500

Review Trade! Trade!
Terms & conditions apply
Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Why trade Berkshire Hathaway stock?

Trading the stock market has become a popular investment activity for many people, especially with the technology that we have these days making it more accessible than ever. There are a vast number of trading brokers, trading platforms and trading apps available for buying and selling Berkshire Hathaway stock with relative ease. The cost involved to get started makes trading Berkshire Hathaway stock accessible to traders of all experience levels from across the globe.

The availability of leverage has also contributed towards the increase in aspiring traders. Leverage allows traders to hold a position size greater than they would have been able to without it. E.g. An account balance of $1,000, could take a position size of $5,000 with 1:5 leverage. Whilst this can increase potential profits, it also greatly increases risk. It is therefore of the upmost importance that you have a clear understanding of the significant risks involved with online trading, especially when using leveraged positions.

The majority of traders would look to buy and sell Berkshire Hathaway stock to try and earn profit from the variation in Berkshire Hathaway’s stock price. When trading Berkshire Hathaway CFDs you can speculate long and short on prices rising or falling without actually needing to invest in Berkshire Hathaway shares. This can make it a more convenient trading method for anyone who has a trading account with an online broker. Alternatively, long term investors may purchase traditional shares in Berkshire Hathaway’s stock for a more long-term hold.

Buying Berkshire Hathaway stock can also be a way to diversify a trading portfolio and to hedge against shares in other stocks or investments in other asset classes such as forex, commodities, precious metals and cryptocurrencies.

However, before investing in Berkshire Hathaway, it is important you understand the dynamics that affect the Berkshire Hathaway stock price.

What drives Berkshire Hathaway’s stock price?

Berkshire Hathaway is a holding company with diversified investments and stakes in different companies and industries. Therefore, analyzing its stock price for possible movements can be complex. Whether you are in for the short, mid or long-term, it is vital you know those factors that can affect the Berkshire Hathaway stock price. We will look at some of the important factors that you need to consider if you are looking to invest in Berkshire Hathaway stock.

New investments, acquisitions, & divestments

Warren Buffet, CEO and chairman of Berkshire Hathaway, constantly explores new investment opportunities and does not hesitate to buy new companies using the huge pile of Berkshire Hathaway’s cash. Also, Warren Buffet often divests his holdings based on his analysis and forecast about a particular company or industry. Therefore, investors must keep themselves up-to-date about the new investments, acquisitions, and divestments of Berkshire Hathaway to forecast the possible direction of the stock. A new investment often is a positive sign of the upwards movement of the stock, whereas a divestment can be a negative sign because of a non-performing investment.

Analysts’ forecasts & earnings reports

Various analysts estimate the earnings of different companies and continuously update their estimates based on different factors, including economic conditions, economic data, and statistics, etc. When the actual earnings report beat their estimates, the stock generally moves higher. Conversely, when the company reports disappointing earnings, the stock price dives. Therefore, investors should pay close attention to the analysts’ estimates and their revisions.

Insurance industry statistics

A major portion of Berkshire Hathaway’s revenues comes from its insurance operations. Therefore, any volatility in its insurance proceeds can severely impact its stock price. To gauge the health of the insurance sector, an investor must read statistics and reports about the insurance sector. Positive growth in the number of insurers can be a positive factor for Berkshire Hathaway’s stock, whereas negative growth in the number of insurers can be negative for Berkshire Hathaway’s stock.

Technical analysis

To track the movement of Berkshire Hathaway’s stock, investors should also perform some technical analysis to corroborate their analysis. During the quiet market scenario when there are no stock triggers, investors should analyze the price action on charts and look for a trend to gauge the direction of the stock.

How to trade Berkshire Hathaway stock online?

If you have taken the time to read through the above, you should hopefully have an understanding of how to trade Berkshire Hathaway stock online. Here is a summary of the key steps:

1.     Decide if trading Berkshire Hathaway stock is for you

Trading Berkshire Hathaway stock online carries an element of risk and can take more time than other forms of investing. You will need to research the company, manage your positions, follow market news and decide how to react to it. It is important to understand the risks and dedication that comes with trading Berkshire Hathaway stock online.

2.     Educate yourself

Before trading Berkshire Hathaway stock, it is imperative to learn as much as possible about investing and trading online. Any mistake could prove to be costly. There is an abundance of free educational materials provided by many online brokers that can help you to improve your trading skills and knowledge.

Most brokerages will also provide a free demo trading account so that you can practice trading Berkshire Hathaway stock online with virtual funds in order to familiarise yourself with the trading platforms and practice your trading strategies until you feel confident enough to open a real trading account.

3.     Choose a Berkshire Hathaway stock broker

In order to trade Berkshire Hathaway stock online, you will need a broker account and trading platform to execute your trade positions through to the market. When choosing a broker, there are a few important things to consider such as regulation, commission fees, platforms, tools, education, funding options and customer support.

If you do not have the time to research brokers, you can see a list of our best brokers that we have already prepared to help traders. If you would like to know more, you can also view our detailed guide on how to choose a trading broker.

4.     Research Berkshire Hathaway

If you have made it this far then you may be ready to start trading Berkshire Hathaway stock online! The next step is to research Berkshire Hathaway to help increase your knowledge in the company. The best brokers should have this information conveniently displayed for you within their trading platform.

5.     Have a trading plan

Some of the most important factors that can help determine Berkshire Hathaway stock trading performance can be the trading plan and discipline. It is important to have a solid trading plan personalised to your own needs that includes the money management and trading strategy that you will use. Most experts and professional traders would try to not let negative emotions such as fear, anger and greed affect their trading strategy.

6.     Buy and sell Berkshire Hathaway stock

Once you feel ready to trade Berkshire Hathaway stock online, you can analyse the market to help decide if and when you will place your trades. After placing a trade on Berkshire Hathaway, you will need to keep track of how it performs and manage it according to your trading plan. Some investors will keep hold of Berkshire Hathaway trades for the long-term, whereas traders may buy and sell Berkshire Hathaway stock on a daily basis.

Is trading Berkshire Hathaway stock right for me?

Trading Berkshire Hathaway stock is a popular choice for long-term investors and active traders. It can be suitable for scalping, day trading and swing trading. Traders who would usually trade forex, trade indices, trade commodities, trade cryptocurrency, may look to diversify their portfolio.

However, it is important to understand the significant risks involved with trading Berkshire Hathaway stock online, especially when using leveraged positions. Most experts would suggest trading on a demo account with virtual funds to begin with.

This can be a useful way to familiarise yourself with how to trade Berkshire Hathaway stock and using trading platforms whilst allowing you to practice your trading strategies until you feel confident and produce consistent results. Most stock brokers provide unlimited demo accounts free of charge.

To accurately track the stock movement of Berkshire Hathaway, investors should keep themselves updated about the latest news, statistics and reports about Berkshire Hathaway and the industries in which it is operating. Furthermore, investors should also notice any divestments of Berkshire Hathaway as it is often a sign of discarding a poorly performing asset.

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