BRK vs SPX

........BRK		S&P
--------------------------------
1YR	28%		28%
3YR	46%		100%
5YR	83%		133%
10YR	291%		362%
15YR	307%		356%

Happy 2022 and wishing everyone good health.
6 Likes

2000 dot.com burst, 2008 GFC, scarred many investors so badly, many investors missed going long on SPY, and now will the last few years of SPY performance make another generation of investors to stay long longer than required?

3 Likes

I’m still waiting for someone to explain to me how the S&P can out perform BRK going forward, beyond the Tinkerbelle approach, clap if you believe. The last time I asked Divi gave me one company increasing in intrinsic value without gains in profits, but didn’t explain how the other 499 will do that as well. Rather than a few numbers from the past, give us your expectations going forward. Continued multiple expansion? Massive jump in average profitability? Huge jump in the number of new rapidly growing companies entering the top 500? Something of that sort must happen for SPX to keep up the pace.

BRK on cruise control will deliver a decent return. If the S&P doesn’t keep expanding the P/E multiple, or some come up with some other change in trajectory it will deliver less.

3 Likes

I’m still waiting for someone to explain to me how the S&P can out perform BRK going forward, beyond the Tinkerbelle approach, clap if you believe.

S&P 500 is adaptable and resilient. It is not static. You have several years of data to back this up.
No need to overthink this. Intrinsic value growth of each company is different.

A TSLA, GOOG and AMZN bring innovation to the table that shows up 3-5 years later in profits.

A BRK and CVS bring slow incremental growth to the table.

A IBM and INTC bring low PE and potential turnaround to the table.

Many companies in S&P will shrink and they will be jettisoned making way to new companies.

4 Likes

Dewerme,

Maybe pretend that you own neither Berkshire (and no tax liabilities) nor the Standard and Poor’s 500 index and play around with the possibilities.

It is easier to believe one’s own work, because you understand your own work and will trust your own thinking rather than a faceless poster on an internet discussion board. This board is only a catalyst.

Or so it seems to me.

1 Like