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The week's question
In March 2025, in the thread "Re: OT, out", Umm asked the members: "Do you think it is because America is made up of magical soil that makes businesses based in America magically profitable?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: Said ✧  😊 😞
Number: of 22349 
Subject: Re: A New Berkshire
Date: 08/18/26 3:34 AM
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BRK vs SPY has been a constant theme on this board since SPY 1500 and here we are at SPY 7800. An ungodly amount of money has not been made because of the persistent bias against SPY.

This is the core of your argument. And reading it my first thought was "That´s the price I am willing to pay to sleep at night" (especially because my constant BRK puts trading disturbs that sleep; holding BRK stock LT is the perfect medicine :)

But let´s invert your question: Is the above really true? Is there such a high price to pay for holding BRK longterm? Surely you remember the guy who for many years regularly posted "S&P vs. BRK", comparing their 1, 5, 10 and 20 year performance, always coming to the conclusion "S&P clearly outperforms BRK", especially over the last years since he posted that comparison, while over 20 years it was a race of equals. As we are talking here about LT investing I just did the same for 20 years:

BRK-A: 94450 -> 747400 = Total Return 691% /CAGR 10.9%
S&P (^GSPC): 1302 -> 7745 = Total Return 495% / CAGR 9.3%

This of course is unfair, as it is the pure S&P index value, without dividends. Including dividends the S&P returned 585% / CAGR 10%. In other words: If the dividends were not strictly reinvested the S&P actually lags BRK over the last 20 years with a 1% lower CAGR.

But the inhuman mechanical investor of course did reinvest all dividends 100% back into the index during all those 20 years. Result under those for the S&P optimal conditions:

BRK-A: 94450 -> 747400 = Total Return 691% /CAGR 10.9%
^SP500TR (S&P incl. dividends reinvested): 1986 -> 17344 = Total Return 773 / CAGR 11.4%

I wouldn´t call a 0.5% higher CAGR an "ungodly amount of money". Actually I am surprised that the difference is that small, practically no price to pay for sleeping well.

Why not flip from BRK vs SPY to BRK & SPY.

Right, that´s a good idea, one Warren probably would second, but it involves market timing. Currently might be a very bad point in time to do that. But such thinking is the opposite of Boglehead mechanical investing, so one would have to do it now - and might regret it. Or not, if we find to our surprise in 5 years that the bull market continued all those years.

(Personally I find that too risky, so I simply stay with Berkshire, or to be more exact: With nearly half of net assets in Berkshire, even more in cash --- and speculating with BRK puts; unbelievably successful, if I might add, though I know that BRK puts trading, sometimes even daytrading, is not exactly something received well on this board :)
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This community has written 21,861 posts about Berkshire Hathaway. The article-length ones it recommended most:
BRK: Why Not XOM? · 62 recs · 2024
Second quarter comments · 60 recs · 2023
Berkshire's Profit Contributors · 58 recs · 2023
Summary of 2Q 2026 · 55 recs · 2026
3Q Summary · 53 recs · 2024
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