Berkshire Shares Run Into Resistance

Before the recent run-up in Berkshire Hathaway shares, the S&P was up 60% from its March 2009 low, while Berkshire was only up 30%.

Berkshire's underperformance versus the S&P 500 in 2009 was widely reported. However, during the recent rally in Berkshire Hathaway, the outperformance since March lows is 52% in the S&P 500, and 47% in Berkshire Hathaway shares, pulling Berkshire to within 5% of equilibrium.

This 5% gap means that even if Berkshire is down on Monday, it could still have some room to move up. More importantly, though, the disequilibrium between the S&P 500 and Berkshire Hathaway B shares, while narrowing, will need to be closed before a firm read can be achieved on the trading dynamic in the Warren Buffett stock.

So what's the takeaway message to investors whose interest in Berkshire Hathaway has been sparked by the recent stock split and S&P 500 news? Berkshire Hathaway is moving more and quicker than ever before, so keep your eye on the Oracle of Omaha.

-- Reported by Eric Rosenbaum in New York.

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