No. of Recommendations: 1
Quick math shows for 2023 BRKA up 15.6% and S&P up 24.8% (by my calc). For fun, I compared returns from 1-1-22 thru current year end 2023 and it appears a similar balance in each to begin would have BRK currently with 17.5% more than the S&P, as BRK was up 4% in 2022 and S&P was down 18%.
Not trying to cherry pick but just run a full 2022 & 2023 comparison. (I own both) Pretty good example of Rule #1 imo.
Happy, Healthy and Prosperous New Year to all!
No. of Recommendations: 14
good post by Professor David Kass on performance:
https://blog.umd.edu/davidkass/2023/12/30/berkshir..."Although Berkshire Hathaway has slightly underperformed the S&P 500 over the past 10 years and approximately equaled it over the past 20 years, it has substantially outperformed this benchmark in each of the six years since 2000 that the S&P 500 had negative returns with dividends included. In 2000, 2001, 2002, 2008, 2018 and 2022, the S&P 500 had an average return of -17.1% as compared to +7.2% for Berkshire Hathaway. Therefore, not only has Berkshire Hathaway approximated the performance of the S&P 500 in recent years, it has also performed as a counter-cyclical asset in each of the years that the S&P 500 registered negative total returns."
Year Berkshire Hathaway S&P 500 (with Dividends included)
2000 +26.6% -9.1%
2001 +6.5% -11.9%
2002 -3.8% -22.1%
2008 -31.8% -37.0%
2018 +2.8% -4.4%
2022 +4.0% -18.1%
Average +7.2% -17.1%
No. of Recommendations: 5
Quick math shows for 2023 BRKA up 15.6% and S&P up 24.8% (by my calc).
Usually when Berkshire has a lagging year it's mainly just the luck of the draw.
Not that it matters, but this year it appears that it's mainly a "magnificent seven" effect.
If I'm not mistaken, Berkshire beat the S&P 593 by a nice amount in 2023.
It did on an equally-weighted basis, anyway. i.e. Berkshire's price rose more than the total return of the average S&P 500 firm.
The outperformance of the biggies this year is quite something to behold. Up about twice what the rest managed.
Jim
No. of Recommendations: 18
Speaking of comparing Berkshire to the S&P, some folks might find this entertaining.
How have sales grown?
www.stonewellfunds.com/BerkshireAndSpyRealRevenue.png
"Sales per share" isn't a great metric of value when comparing two companies, but in this case it's not too terrible.
For the S&P 500 it's quite a useful metric, since it's such a broad set of firms. Over the very long run profits can't rise any more quickly than sales can. Shorter term variation comes mainly from changes in tax rates and the costs of borrowing. Plus a shorter-cycle component for the business cycle, affecting operating margin, giving the one big advantage of using sales versus profits: sales are very much steadier through the business cycle.
For Berkshire, there are two flaws in looking at revenue per share as a proxy for value.
The big obvious one is that revenue doesn't include "look through" revenue of the stocks we hold. (The only mitigation here is that the value of the investments has been a remarkably steady fraction of the value of a share for a very long time, so the rise in revenue on the subs side is probably, by coincidence, not a horrible measure of the progress of the investments side too).
The less obvious is that sales per share will jump around each time there is a transformative acquisition or consolidated investment that is consolidated.
In this stretch, however, there are only two of real note: BNSF in 2009, and the kink in the last period from the consolidation of Pilot since February.
So, overall, I think it still gives some information.
Boring footnotes about the graph:
The data points are monthly, but the data are only quarterly for the S&P 500 and annually for Berkshire, with linear interpolation for each month end in both cases. Revenue for each is inflation adjusted, then plotted as a log value so a constant growth rate would be a straight line. The two are scaled arbitrarily to align them at a baseline at the start of 2004.
Jim
