When it comes to investing, Warren Buffett, chairman of Berkshire Hathaway BRK.B, -1.07%, is unquestionably the greatest who ever lived, posting an extraordinary record over more than five decades. From 1965 through 2018, Berkshire racked up a 20.5% compound annual return, more than double that of the S&P 500 SPX, -0.72%, including dividends.
But now, after profoundly underperforming the S&P 500 throughout the entire 11-year bull market, it’s fair to ask whether Buffett is still, well, Buffett. Even at the company’s virtual annual meeting, held in Omaha on May 2, some questions by shareholders, curated by CNBC’s Becky Quick, struck this listener as unusually sharp.
Questions put to Buffett No wonder shareholders asked about how Berkshire will fare without Buffett and Munger at the helm.• From March 9, 2009, the last bear market low, through Feb. 19, 2020, the recent bull market peak, Berkshire‘s Class B shares surged 396%. Sounds impressive, but Berkshire trailed the SPDR S&P 500 ETF Trust SPY, -0.71% and Vanguard Total Stock Market Index ETF VTI, -0.56% by more than 100 percentage points, after dividends were reinvested.
• Berkshire’s operating businesses are doing well and throw off tons of cash. But this mishmash of insurance, consumer products, energy, utilities and railroads just doesn’t have the growth that forward-looking investors now demand. As oil prices are likely to stay depressed for some time, the energy business’ prospects are particularly grim.
“I would make no promise to anybody that we will do better than the S&P 500. But what I will promise them is that I’ve got 99% of my money in Berkshire.”
howardrgold No. The article states 'Even a modest dividend would have helped Berkshire shareholder's narrow the gap with the S&P 500 over the past 11 years.' That is incorrect, there is no difference. Also, dividends are taxable so the return would be worse for those in a taxable account.
howardrgold In a regulation and policy manipulated economy, making money in the market is easy. When the market is actually driven by supply & demand, you actually have to understand the principal drivers.
howardrgold Every new beginning comes from some other beginning‘s end.
howardrgold Could be the end of an era, but that name will last forever. And ... still a billionaire.
howardrgold Mr. Buffet knows what he’s doing. Shorting and Buying