When it was disclosed in mid-February that Berkshire Hathaway (BRK.A) (NYSE:BRK.B) began buying shares of Sirius XM Holdings (SIRI) during the fourth quarter of 2016, the shares began rising from $4.74. And, by March 13th, the shares had reached an intraday high of $5.53. It was also disclosed that Berkshire had been buying shares of two of the three Liberty Media Corporation tracking stocks. The three tracking stocks represent the Liberty SiriusXM Group, and represent Liberty's 68% stake in Sirius. Those shares also rose significantly.
This rise is not unusual, as the market often follows Berkshire in and out of its investments in other companies. When it is learned that Berkshire has taken a position in a company, the shares rise, and when Berkshire exits these positions, the shares typically decline. These movements by Berkshire have often been referred to as the Warren Buffett effect, named after the Chairman of Berkshire.
