These Under-The-Radar Warren Buffett Stocks Could Soar if S&P 500 Continues Higher

In 2024 alone, the S&P 500 has already reached 17 new all-time highs. Looking back over the past 95 years, only 30 years have seen more all-time highs than 2024, with more than half of the year remaining.

Here are the years with the highest number of all-time highs:

• 1995: 77
• 2021: 70
• 1964: 65
• 2017: 62

There have been 51 years without reaching a new high.

By the way, this Monday, two companies enter the S&P 500: Super Micro Computer (NASDAQ:SMCI) and Deckers Outdoor (NYSE:DECK).

Meanwhile, Warren Buffett's Berkshire Hathaway (NYSE:BRKa) holds shares in two companies within the Invesco S&P 500® Momentum ETF (NYSE:SPMO).

The Invesco S&P 500 Momentum ETF has surged more than +21% this year, outpacing the S&P 500's +8.6% return.

Warren Buffett's companies are both homebuilders.

1. NVR (NYSE:NVR): The homebuilder has a minor ownership interest, which Berkshire Hathaway first disclosed in June 2023. NVR's shares have climbed +8% this year and nearly +41% over the past 12 months. Berkshire Hathaway's stake in NVR is less than 1% of the total outstanding shares.
2. Lennar Corporation (NYSE:LEN): Another homebuilder based in Miami, Lennar is also a modest holding for Buffett, with only 152,572 shares. This represents less than 1% of outstanding shares. Buffett owns Class B shares in Lennar, which surged +65% last year and more than +2.5% this year.

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Professors Cherry Zhang and Ben Jacobsen conducted a thorough analysis of historical stock market data spanning back centuries, examining 114 markets, starting from the UK market in 1693.

Their findings paint a clear picture: On average, stock market performance during winter months surpasses that of summer months. Specifically, they observed a 4% higher average return from November to April compared to May to October.

This phenomenon is commonly known as the "sell in May and go away" pattern, originating in England, suggesting investors sell in May and stay out of the market until Leger Day in September.

For instance, Eagle Bay Capital demonstrated that investing $10,000 in the Dow Jones from November 1, 1950, to April 30, 2013, would yield $776,000, while the same investment from May 1 to October would result in a loss of -$688.

Examining the Nasdaq over the last 50 years, the November to April period emerges as the best six-month stretch.

However, the fear of the May-October period may vary depending on the timeframe analyzed.

In the last 12 years, the S&P 500 was positive in 10 out of 12 years, indicating that performance can differ over shorter periods compared to longer-term averages.

The Bank of Japan introduced negative interest rates in 2016 to spur inflation, and the Bank of Switzerland followed suit. However, currently, only the Bank of Japan maintains negative interest rates.

This situation might change soon. The BoJ is meeting on Tuesday and may raise interest rates for the first time in 17 years. The market strongly believes that if the BoJ doesn't act at this meeting, it will likely do so in April or June.

The market predicts a 66% chance of a rate hike this Tuesday. If not in April, the probability increases to 80%, and if still delayed, June is seen as almost certain, with a 98% likelihood of a rate hike.