It's no secret to political observers that Berkshire Chairman and CEO Warren Buffett is a Democrat and supported that ticket in the presidential election. While Buffett says he's not a card-carrying Democrat, he typically supports that party. Buffett made no secret of his views about our current president-elect when it came to the subject of taxes and tax returns.
But the election is over and Trump's platform is poised to make Berkshire Hathaway (BRK.A) great again. Trump has made no secret of his desire to have American products made in America by Americans. Whether he likes it or not, Berkshire may turn out to be Trump's poster-child company of what his vision aspires to. Berkshire could become a market favorite all over again. Shares are up over 8% since the election, but that could just be the beginning.
No other conglomerate can best the collection of U.S.-based companies that Berkshire holds. A recent radio spot recently profiled a life of a fictitious character who survives by solely using Berkshire products: a manufactured home, insurance, underwear, automobiles, ketchup, bricks, boots and electricity. Berkshire companies like Fruit of the Loom, Acme Brick, Justin Boots, See's Candies and Clayton Homes are precisely the types of businesses that Trump's rhetoric favored.
While Berkshire share's trade at an all-time high now, upside remains. Trading at 1.5x book value is very modest for a company of Berkshire's caliber. The safety and stability that Berkshire provides, not to mention a stable of cash-churning profitable operations, easily justify a much higher multiple. Most notably, in an administration about to be defined by uncertainty and a stock market that has been hot for years, Berkshire stands out as a Fort Knox-type of the investment -- precisely the type that moms and pops would want in their retirement accounts.
Berkshire is a sound and safe investment that is as American as it gets. The company sits atop over $90 billion in float -- insurance premiums that Buffett and his team can use to invest or buy more companies. And while Berkshire will look all over the world for businesses, Buffett has made no secret of his love for America and that its best opportunities are ahead of us.
So how it goes for America will likely be how it goes for Berkshire Hathaway.