YR BRK SPX
5YR-----42%----- 55%
10YR—217%----228%
20YR–577%----602%
Dollar cost average. Get rich slowly. Sleep well. Enjoy life.
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16 years:
The starting date matters a lot when you’re just comparing endpoints.
How would the comparisons be if someone did dollar cost average in SPY or BRK?
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One side is a dumb index and
the other side is the greatest investor of all time making sophisticated investing decisions.
You still have to cherry pick your starting date.
I understand that this is the BRK board and folks are emotionally invested.
How will next 15 years look ?
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Most likely a period of BRK outperformance
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Nah. Just knew Berkshire was a bit expensive on ‘07 so dropped back a year.
You’re always preaching dollar cost averaging. You can go to portfolio visualizer and see how dollar cost averaging into SPY compared with doing the same in Berkshire.
That should be a better comparison, right? Eliminates any cherry picked starting point.
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That is cherry picking.
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Ok, just so I know the rules. When divi picks 15 years, it’s not cherry picking. When Adrian picks 16, it is. Got it.
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Pick industry standard reporting periods. No need to make them up.
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The most important starting date is the date that you invested! My big purchases were in 2012-2014 and I am ahead of the S&P in every case. I also made smaller purchases since then, and again I am ahead of the S&P in these situations as well. This shows the power of BRK, its predictable! Meaning it’s easy to tell when its cheap (ie: likely to produce marketing beating returns).
tecmo
…
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tecmo: This shows the power of BRK, its predictable! Meaning it’s easy to tell when its cheap
Adding to that: That’s why my returns of 15, 20 or whatever years with BRK are much higher than with S&P would have been.
For example having made very decent money 2x last year with BRK calls when it clearly was cheap according to Mungofitch’s Price/PeakBV observations.
Can you do that with S&P?
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Blockquote
Can you do that with S&P?
Yes and much more. SPX is much more liquid and calls and puts available DAILY. So if trading options is your thing, SPX has much more potential with lot more information about if it is cheap or expensive. Lots of people do Iron Condor with it daily.
Nothing unique about BRK other than it has trailed S&P over 5, 10, 15 and 20 years.
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Guy in need of a hobby posts same irrelevant (15yr) chart for 100th time.
Obvious conclusions…
- Guy needs hobby.
- Dollar cost average into BRK and get rich.
Happy Monday!
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Thanks for your interest.
I don’t own SNOW but Upstart is almost profitable. I think it is temporary. 2023 is going to be a tough year and there is a >0 probability that it will go bankrupt. My first buy was at $256. My last buy was $13. My avg. is ~$19. If it survives, by 2030 it will do very well.
I have been dollar cost averaging in S&P for a long time and it is doing well.
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I went back and checked my purchase history. My first small purchase was in 2012, but it wasn’t until 2014 that I made some much larger investments in BRK. Here are my 5 biggest investment purchases.
| BRK | S&P | |||
|---|---|---|---|---|
| Feb 25 2014 | 112.88 | 172.86% | 1845 | 118.37% |
| Oct 15 2014 | 135.48 | 127.34% | 1862 | 116.38% |
| Jan 6 2015 | 148.02 | 108.08% | 2002 | 101.25% |
| Jan 14 2016 | 128.09 | 140.46% | 1990 | 102.46% |
| Dec 21 2018 | 194.19 | 58.61% | 2546 | 58.25% |
| 308 | 4029 |
So this is super simplistic as it takes in the closing date of the S&P vs. my actual purchase price for BRK, and even bigger doesn’t include a roughly 2% per year dividend on the S&P 500.
That said I am well ahead in 4 out of 5 cases - the 2018 I would put on the S&P 500 side however.
My point however was that out of two investment strategies
1 : Dollar Cost Average into S&P 500
2 : Wait for good entry points into BRK
#2 is the better option. I wish Mungo was here to post the numbers, but my sense is that going back 15 years and buying BRK with all available cash at BV under 1.25 and holding cash when above that value would beat the S&P 500.
(Note: Not all my purchases were at BV under 1.25, I wish that I had followed the above strategy more closely!)
tecmo
…
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There is a flaw.
Here are the numbers
The approach is also not consistent.
Dollar cost average for BRK and S&P
or
Get a good entry point for BRK and S&P for both
There is much more info about S&P valuations available if you want to use that approach.
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might not be a great strategy because success depends entirely on how often pb drops that low which you can’t know in advance. general idea good but hard target might never be hit, or hit all the time
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Right. So, my hypothesis upthread: "You can go to portfolio visualizer and see how dollar cost averaging into SPY compared with doing the same in Berkshire.
That should be a better comparison, right? Eliminates any cherry-picked starting point."
$1000 starting, add $1000 per YEAR (thanks, Mike), inflation adjusted.
Results:
YR BRK SPY
5YR-----52%----- 52%
10YR—36%----36%
15YR–29%----29%
20YR–24%----24%
*24YR–21.9%----21.5%
Final balance
5YR-----$8372----- $8261
10YR—$21691----$21746
15YR–$45170----$46757
20YR–$80603----$80775
*24YR–$118007----$109270
Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
*24 years because that’s when I first started investing, with the purchase of two b shares.
Conclusion: There was no real difference. Dollar-cost averaging into Berkshire or SPY got you the same result for the last 20 years.
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At the end of the first year, wouldn’t you have $12,000 deposited.
So aren’t you missing a zero somewhere?
Mike
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Sorry, typo. Teach me to post at 5:00am. Meant adding $1000 per year.
Follow the link to change it to per month. No great difference I expect.