Berkshire Hathaway’s Long-Term Outperformance

Chart of Berkshire Hathaway (BRK.B) vs S&P 500 (SPX)
Chart of Berkshire Hathaway (BRK.B) vs S&P 500 (SPX) – Source: and TradingView

With Berkshire Hathaway’s widely watched 2019 Annual Shareholder Meeting happening over this past weekend, it’s worth noting the long-term outperformance of the company’s shares (BRK.A, BRK.B). As it turns out, this outperformance is exceptionally substantial and impressive. This year’s annual meeting comes amid news that Berkshire Hathaway has been buying shares of (AMZN). This news helped boost Amazon’s stock by more than 3% the day it was announced.

Berkshire Hathaway Long-Term Outperformance vs S&P 500

The 20-year chart above paints a clear picture of just how well Berkshire Hathaway’s stock (BRK.B, the more accessible and affordable Class B shares) has done in the long-term. When compared with the S&P 500 (SPX), BRK.B has much more than doubled benchmark returns since 1999. Even on shorter-term multi-year look-backs, Berkshire Hathaway’s outperformance is also very impressive.

Berkshire’s Short-Term Performance Lags

Only when you get down to the most recent short-term numbers does the situation reverse. Year to date thus far, the S&P 500’s rather stellar performance has substantially eclipsed that of Berkshire Hathaway. To be more precise, BRK.B has climbed only around 7% in 2019 thus far, compared with around 18% for the S&P 500.

Long-Term is What Matters

To keep things in the proper context, though, consider that in Warren Buffett’s world, four months (2019 year-to-date) constitutes just a very minor blip in the much greater scheme of things. To Buffett, it’s clear that having delivered outstanding, market-beating returns over decades (and hopefully for many more decades) is infinitely more important than performance over a handful of months.

IMPORTANT: The information above should not be construed as investment advice and should not be considered as a solicitation to buy or sell securities. Trading and investing in the financial markets involves substantial risk of loss, and may not be suitable for all investors. 

Disclosure: At the time of this article’s publication, we have no position in any security or trade/investment mentioned, nor do we have any business relationship with any company whose stock may be mentioned.

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