This argument and all these numbers are correct except one: S&P value creation has been 7.89% (not 8.89%), compared to Berkshire’s 12.62%, for a difference of 4.73%/year.
My data sources are clearly better than my typing!
Sorry.
Book+dividends is not the best value metric for the S&P 500–trend real earnings is better–but it has nice hard unambiguous inputs which don’t require massaging.
Price to sales isn’t a very good metric, as it doesn’t handle comparison between different companies.
But the rate of evolution of sales per share over time for a single given security isn’t too bad,
as long as the business hasn’t had a transformative change in the interval considered.
The last big transformation at Berkshire was the BNSF deal which is now over a decade ago, having closed in Feb 2010.
(not counting the tax cuts, which affected all US companies)
In the 10 years from 2011 to 2021, Berkshire’s revenue per share rose 2.51%/year faster than that of the S&P 500.
In real terms, 2.2 times as fast: inflation + 4.57%/year instead of inflation + 2.06%/year for the S&P.
Again, sales/share is not the ideal metric of business value progress, but it’s not so bad, and has nice simple hard inputs.
And again about the same conclusion, give or take.
Jim