What: In the past few days the share price of insurance company Berkshire Hathaway has rallied to a new all-time high of a staggering US$229,374. If the name Berkshire Hathaway isn't familiar to you then no doubt the man behind the company – Warren Buffet – is. Over the course of his lifetime, Buffett has grown Berkshire from a small, struggling textile mill into a global business with a market capitalisation of US$370 billion.
In the process, Buffett has made himself one of the world's richest people. At times he has been crowned the 'world's richest', however in recent times Buffett's ranking has slipped. As recently as March, he was in fourth place with an estimated fortune of $58.2 billion according to Forbes.
Fast forward to today and thanks to the sky-rocketing share price of Berkshire which has gained 28% this calendar year, Forbes' estimate of Buffett's wealth has increased to $74.4 billion and his ranking has jumped back to the 'world's second richest' person.
It's quite a different story down here in Australia where some of Australia's billionaires have been watching their fortunes diminish at a startling rate.
Andrew Forrest, the founder and Chairman of iron ore major Fortescue Metals Group Limited (ASX: FMG) will have been watching in horror as the iron ore price has slumped and in the process sent Fortescue's share price down 56% over the past 11 months.
It would be a similar situation for fellow billionaire Kerry Stokes who also has extensive resource sector exposure (as well as owning media assets) via his substantial shareholding in Seven Group Holdings Ltd (ASX: SVW) whose share price is down 31% this year.
Even billionaire James Packer hasn't been immune from a struggling share price. His primary investment – casino owner and operator Crown Resorts Ltd (ASX: CWN) – has suffered a near 21% fall in price over the 2014 calendar year.
Now What: Share prices of course move up and down, so short-term movements in price don't really give a true representation of long-term wealth. That's true whether you are a billionaire with a controlling stake or a shareholder with a much more humble holding.
However, lower prices can create great buying opportunities and when those opportunities also mean you can invest alongside a proven management team with significant skin in the game, then it's time to sharpen your pencil!
