You gotta hand it to Warren Buffett.  It seems like everything he touches turns to gold, even when the facts suggest otherwise. During the last two weeks of November, shares of his publicly traded holding company, Berkshire Hathaway (BRK-A), jumped more than 7% in value.

That’s a nice gain, especially given how Buffett’s top three stock holdings were doing:

• Wells Fargo (NYSE: WFC), Berkshire’s largest holding at $26.8 billion, rose by 4.1%.
• Berkshire’s second-largest holding at $26.5 billion, Kraft Heinz (NSDQ: KHC), gained 2.2%.
• Apple (NSDQ: AAPL), the third-largest position at just under $23 billion, grew by only 0.7%.

Those three stocks account for 40% of Berkshire’s investment portfolio value, yet on average were up only 2.4%. That is less than the 2.6% increase in the SPDR S&P 500 ETF (NYSE: SPY), and only a third of BRK’s share price gain.

All of which begs the question, why the big jump in BRK over such a short period of time?

No Premium for Insurance

Since the stock holdings don’t seem to be the reason, perhaps the cause for BRK’s sudden surge can be found within its suite of operating companies. In 2016, Berkshire earned roughly twice as much from these businesses than from its investment portfolio.

In his most recent annual report to BRK shareholders, Buffett described Berkshire’s insurance business as its “most important sector.” However, the SPDR S&P Insurance ETF (NYSE: KIE) gained only 2.4% over the last two weeks of November, so it does not appear that an overall rise in the value of insurance companies is at work here.

Buffett’s longtime investment in GEICO is well known, but his BH Reinsurance unit generated nearly double the profits as GEICO in 2016. In fact, GEICO contributed only 21% of the total earnings from Berkshire’s insurance operations division last year.

All Aboard the Tax Cut Train

Less well known is Berkshire’s strong presence in the railroad and energy sectors, which (per Buffett) accounted for 33% of Berkshire’s after-tax operating earnings last year.  However, with big profit margins come higher taxes, which Berkshire paid to the tune of more than 28% during the most recent quarter.

That is much higher than the 20% top corporate tax rate under the tax bill working its way through Congress. If nothing else changes, Berkshire stands to gain a multi-billion dollar profit windfall once the lower tax rate becomes effective.

It’s not only Berkshire that stands to benefit. The iShares Transportation Average ETF (BATS: IYT) gained 7.5% while BRK jumped 7.1%. Apparently, a lot of investors believe the tax cut will soon become law. But if it does not, don’t be surprised to see BRK and a host of other companies take a quick 5% hit.

The irony of this all is Buffett’s strong disdain for tax cuts in the first place. He has frequently stated that he is the last person in the world in that needs a tax cut given his massive wealth. But if a corporate tax cut becomes law, he is going to become an even richer man whether he likes it or not.