Thursday, October 5, 2017

Warren Buffett? No, Thanks.

Is it the end of Warren Buffett's era? Look at the chart below:


The chart shows the price action of Berkshire Hathaway shares against the S&P500 index since the beginning of the current bull market in stocks (March 2009). Note that the red arrow goes down, which means that investment in Berkshire has returned less than investment in the broad stock market...

It looks like investing in Warren Buffett's flagship company makes no sense. Mr. Buffett is beaten up by the broad stock market.

Sorry for being nasty...


  1. If this arrow is redrawn from the low of July 2011, it would be outperformance?

  2. This comment has been removed by the author.

    1. It wouldn't. But Warren Buffett is a long -term investor so his performance should be measured from the long-term perspective. So since 2009 has has done nothing special.

      But since, say, 2000, he has overperformed the broad stock market in an impressive way. Etc.

      On the other hand, I think that a company with market cap of around 500 billion does not offer great growth potential. How could it? To grow to 1 trillion?
      I would like to see some kind of split off in Berkshire business model to make it attractive for another 10 - 20 years...but is Buffett able to do it? I kind of doubt it.