The Buffett bounce: Berkshire is enjoying a superb comeback this year

So far in 2016, Warren Buffett's Berkshire Hathaway is doing something very familiar once again: beating the market.

Year to date, shares of Berkshire Hathaway — which trade in both astronomic Class A and more standard-priced Class B flavors — are up some 13.5 percent, while the broad S&P 500 has risen about 6.8 percent.

This outperformance comes after an unusually dour year for Berkshire in 2015, which saw the company's value slide by 12 percent even as the S&P remained essentially flat.


Berkshire shares have done especially well over the past months, reaping the benefits of an overall updraft among the financials — a group of stocks among which Berkshire holds many investments, and into which the company as a whole technically falls.

From a market-based standpoint, shifting investor preferences are also putting the wind at the back of Berkshire's sails. In a reversal from recent years, value stocks are outperforming growth names in 2016. Buffett happens to be the world's most famous value investor, and his company's portfolio is naturally more weighted toward the value-oriented names.

Finally, and most generally, "A bet on Berkshire Hathaway is really a bet on the recovery of the U.S. economy," Boris Schlossberg of BK Asset Management said Friday on CNBC's "Trading Nation." "Overall, if you believe that growth continues, it's all systems go for Berkshire for the time being."

Indeed, not only does the company hold names highly exposed to economic growth, but it operates massive railroad network Burlington Northern Santa Fe, which benefits as more goods are sent across the country.

On Tuesday, even with the shares losing a bit of ground, Berkshire is just 2 percent away from making an all-time high.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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