... BRK SPX
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YTD 8% -2%
1 38% 24%
3 65% 90%
5 100% 124%
10 316% 341%
15 449% 401%
includes lost decade, great recession, global pandemic
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I guess divi with your posts you whipped the dog Berky to run faster than SP500… Congrats.
4 Likes
Why no commentary on the age of the CEO? Back when you were posting this comparison, on average every 10 days, you always informed us that the CEO was old? Why no more?
jk
because it is getting old???
3 Likes
Years of grievance are often followed by acceptance…
…that in the long run Berkshire will prevail!
2 Likes
Why no commentary on the age of the CEO?
The CEO is old and wing man older. Both will not be here in 10 years.
Ted and Todd are still duds missing out on exceptional decade.
Big mistakes were made - Oxy, KHC, PCC, Airlines, WFC, selling during the pandemic (BAC and APPL were positives)
Innovative companies will far outperform BRK in coming 10 - 15 years.
BRK operations are still a low margin capital intensive growing very slowly.
BRK is likely to disintegrate in next 15 years.
New will replace the old. Always has, always will.
S&P will outperform BRK this decade. Dollar cost average. Sleep well. Get rich slowly.
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includes lost decade, great recession, global pandemic
Isn’t the “lost decade” 2000-2009? SPY was -1% CAGR.
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My tax lot from 12/31/12 is now just less than 1% annualized versus the spx total return index, which is held in a taxable account so I had zero tax consequences thus far in my Berkshire position. Not bad for a non innovative company.
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<Innovative companies will far outperform BRK in coming 10 - 15 years.>
No doubt, some will do much better. Others will fail completely. You need to tell us which ones win, which ones lose, just buying the S&P won’t cut it. You’ll get both. At the current price for the S&P, you might find you paid too much for the winners.
Still looking for your P/E ratio projections for the next decade, but I can sleep well waiting for them.
5 Likes
includes lost decade, great recession, global pandemic
…
Isn’t the “lost decade” 2000-2009? SPY was -1% CAGR.
Fun with numbers:
For all starting dates since January 1930, the worst rolling 10 year stretch for the S&P 500 and cap-weight predecessors was the stretch 1999-03-09 through 2009-03-09.
The real total return was -6.784%/year compounded.
So, that’s the most-lost decade.
(March 2000 was a slightly worse start date in general, but March 2009 was a fabulously unlucky end date so the 1999-2009 stretch is the extreme)
FWIW, today’s S&P 500 valuation based on multiple of smoothed trend earnings is remarkably similar to that of March 9 1999.
I estimate the trend earnings yield at 2.477% then and 2.680% now.
So…it was 8% more expensive then than it is now–not as extreme. So, nothing to worry about.
Jim
15 Likes
Alibaba, Tencent & Prosus, Meta (FB) and Baidu. I’ve not seen anything else that takes my fancy. I hold all four. Also a play on China long term too.
1 Like
Still looking for your P/E ratio projections for the next decade
If you think market multiples are going to go down, Berkshire valuation will also go down with them. Berkshire is more aligned with overall economy than the Index. Index has some companies that can grow faster than economy, but Berkshire is going to be weighed down by the overall economy.
I am using economy, because market PE is an expression of future growth. Otherwise PE is such a useless number, it should be banned.
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those “duds” were the one who got us Apple to begin with. You honestly think that BHE will slowly disintegrate in 15 years ? LOL. One last question, if you think PCP, OXY, KHC, Airlines ,and WFC were terrible, why are you using Warren and Charlie being gone as a negative (Warren was in charge of all those transactions) ?
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“BRK is likely to disintegrate in next 15 years.”
With annual normalized earnings of over $40 Billion and growing year after year?! I may vote it the LEAST likely to disintegrate, but I suppose that’s what makes markets. Management has consistently and successfully been looking 10+ years ahead for decades now so it’s truly built to last.
7 Likes
Big mistakes were made - Oxy, KHC, PCC, Airlines, WFC, selling during the pandemic (BAC and APPL were positives)
OXY a mistake? I wish my mistakes would turn out that well. I wouldn’t call PCC and the Airlines mistakes. It was impossible to know that a pandemic would disrupt the industry when Buffett bought, but when the facts changed Buffett changed his mind as it should be.
On WFC I tend to agree, my theory is that management really pissed him off.
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OXY a mistake ?
Oxy in my opinion is by far the largest mistake. Monumental. The approach that has made WEB so successful, failed him. The problem was failure of imagination.
WEB has been skewing far towards safety and incase of Oxy (and several others) it turned out to be exactly opposite.
Gone is the upbeat guy who walked into the Geico office on a weekend trying to understand insurance. Instead we have this guy who look for safety and panics and sells (pandemic).
When WEB ploughed $10B in Oxy, TSLA was available in the market at for $40B.
TSLA was on its knees. It was looking for capital and paying 9% interest.
Without the capital infusion TSLA was high risk, teetering on bankruptcy. Elon was sleeping in the factory.
With capital, TSLA was highly probable to be a huge success. (I wrote WEB a letter then).
BRK had the opposite problem. It did not know what to do with the $110B cash. Munger (who was enamored with the Chinese BYD dude) was ridiculing Elon.
Instead, WEB invested in OXY.
OXY story has been a mess. Warrants are under water and BRK sold all its shares for a loss.
Also, instead of being a good world citizen and supporting “green energy” in times of need, WEB jumped in with both feet with the “oil” guys. Disaster.
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div, it was your choice, not Buffett’s, to hold Berkshire not go all in on Tesla when it was selling at $40 bil. What happened?
You need to come clean, tell us why you did that. Maybe also tell us why you expect someone else to always invest in the stocks that go up the most…while evidently expecting so little of yourself.
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“you need to come clean, tell us why you did that. Maybe also tell us why you expect someone else to always invest in the stocks that go up the most…while evidently expecting so little of yourself.”
Debating the Divster reminds me of the cartoon where the wife says to the husband- “When are you coming to bed?” He says - “In a few minutes, someone is wrong on the Internet and I need to correct them”
The other irony is I personally doubt div has amassed the wealth of many on this Board. He is quick to point out the faults of others but never answers any direct question.
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Guys, critiquing BRK and WEB is fine.
You guys continue to resort to insults and bullying by getting personal (how much money I have, how old I am, what I invest in etc.) without addition to the discussion.
It does not work. Suggest you use the ignore button.
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div they are not insults, but logical questions. It seems grievance has overcome you, that you are stuck 24/7 there.
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