Buffett vs The Market Since The Crash

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Leesbro63
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Buffett vs The Market Since The Crash

Post by Leesbro63 » Sat May 09, 2015 1:14 pm

I am trying to figure out how Berkshire Hathaway stock has performed vs the S&P500 or "VTI" with dividends reinvested since about the bottom of the 2008-9 crash. Has W.B. beaten the market?

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Rx 4 investing
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Re: Buffett vs The Market Since The Crash

Post by Rx 4 investing » Sat May 09, 2015 1:31 pm

M* table of BRK.B and S & P yearly performance two lines below.

http://performance.morningstar.com/stoc ... on?t=BRK.B
“Everyone is a disciplined, long-term investor until the market goes down.” – Steve Forbes

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Maynard F. Speer
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Re: Buffett vs The Market Since The Crash

Post by Maynard F. Speer » Sat May 09, 2015 1:35 pm

I've got it that in the 5 years between 2008 and 2013, Berkshire Hathaway returned 91%, while the S&P 500 returned 128% - making it the first ever 5-year period Buffett's lagged the market ..

http://fortune.com/2014/03/01/in-a-firs ... -over-six/

I think that says more about the extent markets have risen on quantitative easing myself .. When markets are buoyed by abnormal monetary policy, everything's dredged up together, and it's anyone's guess where they'll go next
"Economics is a method rather than a doctrine, an apparatus of the mind, a technique of thinking, which helps its possessor to draw correct conclusions." - John Maynard Keynes

beammeupscotty
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Re: Buffett vs The Market Since The Crash

Post by beammeupscotty » Sat May 09, 2015 2:27 pm

No.

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JoMoney
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Re: Buffett vs The Market Since The Crash

Post by JoMoney » Sat May 09, 2015 3:44 pm

Buffett gives the performance of Berkshire right at the top of each annual letter to the shareholders
http://www.berkshirehathaway.com/letters/2014ltr.pdf

In particular, I like where he lists BRK's growth in "Book Value" relative to the S&P500
(Year) - (BRK Book Value Growth) - (S&P 500 Total Return)
2009 - 19.8 - 26.5
2010 - 13.0 - 15.1
2011 - 4.6 - 2.1
2012 - 14.4 - 16.0
2013 - 18.2 - 32.4
2014 - 8.3 - 13.7

Despite the fact that book value can be manipulated, and it's not really a good measure of value in some industries, I do find it somewhat instructive.
Theoretically, Buffett could just issue shares of BRK and buy the S&P then show the market value as the book value of those assets.
Over this limited time frame, it looks like the owners equity has not increased at a rate as high as the S&P500

But the performance in a big down year prior gives him a bit of slack:
2008 (9.6) (37.0)
As well as the fact that there may be other accounting rules impacting the book value (his derivatives position that he's talked about) and the way that's accounted for.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

evestor
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Re: Buffett vs The Market Since The Crash

Post by evestor » Sat May 09, 2015 3:48 pm

To understand the whole picture you also have to compare BRK to the market on the way down in to the crash too. What if BRK didn't drop as much as the market? (Hint: it didn't).

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