(Berkshire Hathaway story updated for closing price and volume spike)

OMAHA, Neb. ( TheStreet) -- The market may have been expecting Berkshire Hathaway's ( BRK.B) addition to the S&P 500 for some time already, but it didn't act that way on Wednesday.

Just under 20 million Berkshire Hathaway B shares were traded on Wednesday. That would equate to well over a year of trading in Berkshire Hathaway's B shares at its previous average daily volume of 41,000 shares.

Even though Berkshire Hathaway has had some big trading days in the past week -- on Jan. 21, close to 15 million shares were traded -- Wednesday was the biggest day yet for trading in Warren Buffett's stock.

Of course, the recent big days of trading in Berkshire Hathaway were preceded by the 50-to-1 stock split in Berkshire's B shares, which created a level of liquidity in the shares that finally allowed S&P to invite Warren Buffett into the biggest market benchmark.

What's more, Berkshire Hathaway shares were up close to 5% on a day when all the broad market indexes were up by much smaller gains, after the Fed said it would keep interest rates near current historically low levels. The financial sector to which Berkshire is most closely linked was up 1% at the close on Wednesday.

This week's hubbub surrounding the Berkshire Hathaway B shares started on Tuesday night after S&P announced that Berkshire Hathaway would replace its newest acquisition Burlington Northern ( BNI) in the market bellwether S&P 500 Index.

In the after-market session on Tuesday and pre-market session on Wednesday, Berkshire was up more than 8%.

Berkshire Hathaway's gain of just under 5% by the close on Wednesday also easily beat the S&P 500's rise of 0.5% on Wednesday. Take that S&P, from your newest holding. Maybe now the all the talk about Berkshire's underperformance versus the S&P 500 in 2009 will draw to a close.

Berkshire's B shares were up 4.9%, or a little over $3.36, to a price $71.36 at the close on Wednesday.

All the action makes Bill Bergman, an analyst at Morningstar, and one of the few analysts that cover the famed Warren Buffett stock, scratch his head and wonder about the efficiency of the markets.

"I'm surprised by it. Normally, the market can anticipate this happening and the reaction should not be as dramatic as this," Bergman said, adding, "it calls into question some assumptions about market efficiency."

Bergman explained that it was more or less a foregone conclusion this would happen, and it is common knowledge that stocks will react to the S&P 500 inclusion because index funds have to buy. "Here is a case where it did not adjust, just look at the trading activity today," Bergman said.

Bergman stressed - and hopes - that in a few weeks the market will look back on this as a less significant event, and get back to a focus on whether or not Berkshire is presently undervalued, especially as Berkshire's earnings come out. Berkshire significantly unperformed the S&P 500 in 2009.

However, Bergman said that the sudden positive turn on Berkshire still, "looks like it could be a durable price hike."

Academic studies have suggested that addition to the S&P 500 index can have a big impact on stock returns.

Market watchers have been speculating for some time as to whether the stock split would materially impact Berkshire Hathaway's stock value.

Even before the S&P 500 news and the 52-week high was attained in the pre-market on Wednesday, Berkshire Hathaway's value has been rising during a five-day period when the broad equity markets slumped -- the Nasdaq, Dow Jones Industrial Average, and S&P 500 have all been trending down. Berkshire has also been trading away from the downward trend in insurance and financial services, one of its portfolio bread-and-butter sectors.

Volumes in Berkshire Hathaway trading have also exceeded expectation. In the first five days of trading after the B share stock split, 50 million Berkshire Hathaway B shares were traded, in what amounts to three-and-a-half years' worth of trading based on the previous 41,000 average daily volume of shares traded.

Berkshire seems to hit a new and improved average daily volume of trading every day now.

The ramifications of the Berkshire Hathaway stock split and the S&P 500 addition will be important to monitor in the days to come, as there may also be a changing dynamic in the premium/discount level between the famed Berkshire Hathaway A Shares and the B Shares.

Both Berkshire Hathaway shares were up on Wednesday, by 4.86% in the case of the A shares and 4.53% in the case of the B shares, still not near the 1% discount level in the B shares which Buffett himself has said should trigger an arbitrage trade .

In the least, active managers the world over can't be too happy on Wednesday: it may have just gotten a little bit harder for active managers to beat the indexes, now going up against Warren Buffett as part of the S&P return mix.

However, it has become a lot easier for investors to gain access to the Oracle of Omaha through the Berkshire Hathaway B Shares, and at least through the first week of trading, and especially with Wednesday's 11 million shares by mid-day, it wasn't just S&P that decided to bulk up on Buffett.

Of course, it's not just a little of Warren Buffett headed into the S&P 500. Berkshire's legendary portfolio includes many of the global corporate elite also: a 12.8% stake in American Express ( AXP); 9.4% in Kraft; close to 7% in Wells Fargo ( WFC); a little under 1% of Wal-Mart ( WMT); and close to 9% of Coca Cola ( KO).

-- Reported by Eric Rosenbaum in New York.


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