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I've always felt the real magic of Berkshire is the wonderful combination of Index-like returns and Fort Knox type safety!
Where else can you hope to match the returns of the S&P500 and sleep like a baby every night...

"I believe Berkshire can handle financial disasters of a magnitude beyond any heretofore experienced. This ability is one we will not relinquish. When economic upsets occur, as they will, Berkshire’s goal will be to function as an asset to the country – just as it was in a very minor way in 2008-9 and to help extinguish the financial fire rather than to be among the many companies that, inadvertently or otherwise, ignited the conflagration." ~Warren Buffett

Mr. Buffett has significantly reduced the sales of stomach antacids to Berkshire shareholders during the rough patches of 2000, 2001, 2002, 2008, 2018 & 2022 when the S&P fell an average of -17.1% while BRK share price increased an average of +7.2%.

"The pain of losing is psychologically about twice as powerful as the pleasure of gaining." ~Behavioral Economics

"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."
~Doug Kass

https://blog.umd.edu/davidkass/2023/12/30/berkshir...

“ I've always felt the real magic of Berkshire is the wonderful combination of Index-like returns and Fort Knox type safety!
Where else can you hope to match the returns of the S&P500 and sleep like a baby every night...”

Agree. Berkshire is the Fort Knox of capital.

“ Mr. Buffett has significantly reduced the sales of stomach antacids to Berkshire shareholders during the rough patches of 2000, 2001, 2002, 2008, 2018 & 2022 when the S&P fell an average of -17.1% while BRK share price increased an average of +7.2%.”

Disagree. Data:

Max Drawdown
1999-2003
SPY -45%
BRK -42%

2007-2010
SPY -51%
BRK -46%

2020-2023
SPY -24%
BRK -24%

The share price can do anything. Berkshire suffers drawdowns along with the market. Slightly less sometimes, but still very painful. And Berkshire can lag the market for years and years, also difficult and painful for investors.

Your #'s include pre-bear market and post bear market recovery years. (Different yardstick.)

Fact remains...

"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."

"In 2000, 2001, 2002, 2008, 2018 and 2022, bear markets the S&P 500 had an average return of -17.1% as compared to +7.2% for Berkshire Hathaway."

https://blog.umd.edu/davidkass/2023/12/30/berkshir...

I've always felt the real magic of Berkshire is the wonderful combination of Index-like returns and Fort Knox type safety!
Where else can you hope to match the returns of the S&P500 and sleep like a baby every night...

Pity that we don't have polls. I'd bet that many if not most here see it likewise, that this is the single largest reason to own Berkshire.

This point goes in the direction of a very interesting recent discussion on the Mechanical Investing board: "What constitutes success?". Most if not all there agreed for them it's NOT (or not only) about beating the Index, but to avoid large drawdowns, to have a smoother ride, with events like the Grand Financial Crisis having less catastrophic effects on their portfolios.

In the case of Berkshire I think this "having a smoother ride in case of catastrophic events" can be extended beyond the raw numbers, beyond the comparison "How much did BRK vs. S&P gain/lose the last X years?": Berkshire is not and arguably never was so overvalued as the S&P currently is. This means even if there is a dramatic crash tomorrow, bringing down the index to it's historical levels, then even if it drags Berkshire the same % down, I will still sleep better owning Berkshire than S&P, as I am far more convinced about it's stock price recovering during my lifetime (or quicker :) from its normal valuation than the S&P from it's not normal valuation.


It appears that Mr. Buffett does care about the size of his canvas and is averse to shrinking it....... This view receives support in the fact that he resisted buying back Berkshire stock for a long, long time, despite repeated calls for it........ I recall being puzzled by his behavior, given that he was a huge proponent of buying back stock when it trades below intrinsic value......
most of Berkshire shareholders are nameless and faceless to him.

Why not simply believing what he stated very clearly numerous times, that he sees them as his partners and has an aversion to buy back shares from his partners when they are cheap as he feels this is to take advantage of his partners? I fully understand this and fully believe that he means what he says - and this in the world of big business so unique attitude actually is one of the reasons for me to own Berkshire shares, feeling honored and grateful to be called "partner" by this very special man.

Addendum: Sorry, but I want to add a few more words about the man himself, as with his near lifelong companion gone I am afraid .......

Warren for me is far more than the most successful (or not; what does it really matter) investor. I utterly love his moral compass.

Not just towards his "partners". Be it his stance towards family planning; towards investments in companies his moral compass forbids/abhors; towards his and his secretaries taxes and especially his extreme stance towards inheritance tax ("Gene Lottery").

I fully share all those views --- and find it incredible that he unwavering stood by them during his meteoric rise.


P.S.: Please, refrain from commenting on the issues I just mentioned. I know they are highly divisive in the US and the very last I want is to ignite a heated political debate (for that there is an own board). All I say above is just about expressing my very personal admiration for the man, and I am aware and respect that you may have a very different opinion regarding the mentioned issues.

My point is simple: Berkshire has substantially outperformed the benchmark in each of the six years since 2000 that the S&P 500 had negative returns.

Year 2000 Berkshire Hathaway +26.6% S&P 500 (with Dividends included) -9%
Year 2001 Berkshire Hathaway +6.5% S&P 500 (with Dividends included) -11.9%
Year 2002 Berkshire Hathaway 13.8 S&P 500 (with Dividends included) -22%
Year 2008 Berkshire Hathaway -31.8% S&P 500 (with Dividends included) -37%
Year 2018 Berkshire Hathaway +2.8% S&P 500 (with Dividends included) -4.4%
Year 2022 Berkshire Hathaway +4% S&P 500 (with Dividends included) -18.1%

Average Berkshire Hathaway +7.2% S&P 500 (with Dividends included) -17.1%

"The pain of losing is psychologically about twice as powerful as the pleasure of gaining." ~Behavioral Economics

Avoiding that pain is priceless...

Happy annual meeting day!

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