Shares of RH surged Friday after word that Warren Buffett's Berkshire Hathaway had bought a stake in the furniture retailer. What the crowd piling into the company formerly known as Restoration Hardware doesn't realize is that the Oracle of Omaha has been on a bit of a cold streak.
The good news for Berkshire fans is that the ever-patient and long-term focused Buffett may be getting a hot hand again, just as the value investing philosophy he popularized comes back into favor on Wall Street.
Following the stock picks of the Berkshire portfolio would have underperformed a market benchmark by 2.5% the last three years, according to Symmetric.io, a data firm that uses proprietary calculations of the quarterly filings to uncover the best stock-picking investors. Berkshire's stock itself has underperformed the S&P 500 over that time, perhaps reflecting the overall value bent of the conglomerate's private business portfolio as well.
But 2019 is shaping up to be a rebound for the longtime investor and his value-hunting partners. He's now beating the market benchmark by 1.2% over the last 12 months, according to Symmetric.
Sizable stock bets on financials like Bank of America, Wells Fargo and U.S. Bancorp, which saw negative returns of 15%, 21.8% and 12.3% in 2018, are breaking out this quarter. Only Wells Fargo — up 20.9% year to date including dividends and other income — is underperforming the broad S&P 500 in 2019. Berkshire slightly cut its stake in Wells Fargo, but kept its holdings pretty much the same with other big banks, according to the third-quarter filing.