15 years chart - SPX vs BRK (Jan 2023 End)

There is something wrong with this conclusion. The calculations are not correct.

If I manually do the calc (assuming you buy at 1st of the month), the separation is consistent with the chart I posted in my original post.

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What final balances do you get?

Here’s the results from portfolio visualizer, investing $1,000 inflation adjusted per month:

Final balance:
5 years:
BRK.b $87,139
SPY $82,868

10 years:
BRK.b $234,927
SPY $233,860

15 years:
BRK.b $513,951
SPY $533,816
+3.8% by investing in SPY.

20 years:
BRK.b $932,620
SPY $927,727

24 years
BRK.b $1,397,303
SPY $1,285,628

There’s not much in it. My conclusion is valid.

Backtest Portfolio Asset Allocation (portfoliovisualizer.com)

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Thanks, these results are interesting.
Do the S&P returns reflect taxes on the reinvested dividends?
(If not the 15 yr S&P advantage will disappear, and all the other results will not be as close as they seem. Me thinks!)
Also, imagine how much better an investor who used a bit of common sense and only bought BRK when P/B was 1.3 or less would have fared?

No taxes are taken out. Too variable.

With Berkshire in taxable we can plan when we pay, somewhat. That is an advantage. Not a big one, though. Got to pay sometime, or donate.

To quote Dividends20 from upthread:
“One side is a dumb index and the other side is the greatest investor of all time making sophisticated investing decisions.”

That’s a good point. Over my entire time investing, 24 years, monthly or annually dollar cost averaging into an S&P500 index fund was almost as good as dollar cost averaging into Berkshire (assuming you could have bought fractional Berkshire shares, which you couldn’t).

That’s really not a very good result, given the risk we take in Berkshire - single stock, insurance liabilities, Buffett’s age.

I have no regrets. I think I’ve learned a lot by following Berkshire, Buffett and Munger. And though it’s too much work to try to prove it, I think I’ve done quite a bit better than the monthly dollar cost average approach.

I’ll just say, the “dumb index” is virtually impossible to beat on a risk adjusted basis. The markets are efficient. You can count on one hand the number of investors who have outperformed it over an investment career. All of which makes Berkshires consistent outperformance truly remarkable.
As for the risk profile… BRK has been roughly in line with the S&P. For example, Berkshires worst year was -29.36%, while the S&P was -32.74%.
And the max drawdown was BRK -45.15%, S&P -46.33%.
Lastly just buying BRK @ 1.3X book or less would have allowed you to beat the index handily, You do not find many investments where you can say that over the long term.
All the best!


This statement negates your thesis. The only way Berkshire can beat index is you have to begin with favorable valuation and exit at high valuation is not a strong argument.

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Berkshire beats the index without regard to valuation. (by a narrow margin) Look at the results over many time frames.
Berkshire beats the index handily (by a wide margin) if you buy @ reasonable valuation.
Look at the results, do your eyes work?


I am referring to your argument. BTW, we all have eyes that sees what it wants to.

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End date is as of today


My DCA numbers are consistent with this.

These results are after S&P had a tough year and BRK had a good year. BRK is still under performing. Moreover, BRK PBV is 1.5 as of today, which is high.

  • Master Divi’s original argument and suggested strategy is “Dollar cost average into S&P”, right?

  • That means regularly putting money into it = buying, right?

  • verystablegenius is saying if putting those monies instead into BRK if it’s at 1.3x book or less would have beat Divi’s strategy handily.

Where is that simple logic wrong?


The logic is wrong because you may not get Berky at 1.3x. If you can demonstrate buying Berky similar dollar cost averaging then there is an apples-to-apples comparison, otherwise, you are torturing the process to drive an outcome you desire.


BRK repeatedly over those, what, 20 years, or 24 years, traded at 1.3x book. What’s the problem to instead of buying every 1 year or so to accumulate those monies and to put them all in each time 1.3x is reached again?

P. S. : Actually this is why since I first bought BRK my returns with it are wildly higher than they’d been with dollar cost averaging into S&P. Because I several times bought when it was cheap. It works. And it does so because as verystablegenius and many others before said it’s a) easy to recognize that and b) you can rely on it not staying that cheap forever.

P. P. S.: Anyway, it’s fruitless trying to tell “S&P dollar cost averagers” about the beauty and possibilities (leverage etc.) of BRK investments, based on it’s high degree of predictability. Many men better than me tried that often enough on the old forum. So I resign from it and leave it to the other side to equally fruitless tell me my sleep would be better if I’d dollar cost average into S&P.


tecmo had a similar point that he bought BRK at low PBV and should have outperformed S&P. However, I provided data that showed that even when he bought BRK at low points, S&P still beat BRK (even with the unfair comparison).

Additionally, this after S&P’s bad year and BRKs good year with a high PBV of 1.5

I understand that this is BRK board and folks have a bias and vested interest.


Does Divi go on the hundreds of other individual stock discussion boards here at the Fool to proselytize about dollar cost averaging into the S&P 500? Or are we the only truly blessed board to receive that wisdom?


So why in the world do you continue your obsessive and evangelistic preaching?


This is the only conversation and you want to kill that? if you don’t like then start something interesting to talk.

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Or got to Shrewdm.com Good discussions over there.


Where are you getting your numbers?

The DCA numbers from Portfolio visualizer are not consistent with yours - see my post upthread.

Stockcharts 20 years total return:

SPY 621%
BRK.b 623%

I agree that this is not a great performance for Berkshire - it should have done better.


BRK is down 2% over the last year, per Yahoo! Finance. Not a good year. Better than S&P 500, down 8% (I guess that would be down ~6% after dividends), but certainly not good. The year before was real good for BRK, but it was good for the S&P500 too.

BRK’s price to peak book is 1.34, not high, about average, if I’m not mistaken. If history holds, price to peak book is a better predictor of future performance than price/book.

S&P500’s CAPE (Price/10 year average earning) is 29.9, which is high. Not nose-bleed high by recent standards, but it’s high.

I like BRK’s valuation better than S&P500 at the moment, that’s for sure, though there is single company risk with BRK. Not as much risk as most companies, considering the diversified companies and stocks that comprise its value, but there’s still real single company risk here.