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Stock Strategist

Berkshire Weathers the Storms

Recent hurricanes add to a difficult year for the insurance business but have minimal impact on our valuation.

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Given the storm damage and flooding created by hurricanes Harvey, Irma, and Maria during the third quarter, we find it unlikely that wide-moat  Berkshire Hathaway (BRK.A)/(BRK.B) will come away unscathed.

With estimates of total insured damages from Harvey and Irma running at $50 billion-$70 billion and Maria looking to be a $40 billion-$85 billion event, 2017 is expected to be as one of the worst years for natural disasters since 2005, when hurricanes Katrina, Rita, and Wilma racked up more than $50 billion in total insured losses.

Greggory Warren does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.