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Is This What's Holding Berkshire Hathaway Stock Back?

Warren Buffett has been at the helm of Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) for decades, and his track record there makes him one of the most successful investors in history. His long-term


Warren Buffett has been at the helm of Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) for decades, and his track record there makes him one of the most successful investors in history. His long-term performance is nearly unmatched, and those who've stuck by the Oracle of Omaha over the years have gotten big rewards for their loyalty.

Yet recently, Berkshire has underperformed the broader market by a significant margin. In 2019 alone, Berkshire stock is up just 1%, compared to a nearly 17% rise in the S&P 500 index. Although there are undoubtedly many different factors at work to explain Berkshire's underperformance, there's also a key factor that many investors don't even realize is happening that could have a dampening effect on the stock's upward price moves.

It's been 13 years since Warren Buffett announced that he would give away the lion's share of his fortune gradually over the course of the rest of his lifetime. The Berkshire CEO started out with an initial gift of Berkshire stock worth $1.5 billion, and from there, annual gifts came at regular intervals. For instance, earlier this year, Buffett gave away roughly 16.8 million Class B shares of Berkshire, worth roughly $3.6 billion at the time. The bulk of those shares -- about 12.8 million -- went to the Bill and Melinda Gates Foundation.

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Source Fool.com

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