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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
No. of Recommendations: 2
BRK: 475%
S&P: 650%
No. of Recommendations: 16
No, those aren't the right figures, both should be a bit lower.
BRK: 468% (12.28%/year = inflation + 9.39%/year)
SPY total return: 634% (14.21%/year = inflation + 11.26%/year)
Advantage SPY by about 1.9%/year.
The average S&P 500 dividend yield has been 1.87% in the last 15 years. Total value growth for the S&P 500 is basically that number, plus the index value growth rate.
The S&P 500 has certainly done very well, no doubt about it. The index number rose inflation + 12.19%/year.
Does anyone have any thoughts on how much the *value* of the S&P 500 index has gone up in 15 years?
TTM real earnings rose inflation + 6.02%/year
Smoothed real earnings rose inflation + 4.37%/year
Real dividends up inflation + 5.77%/year
TTM sales up inflation + 2.77%/year
Jim
No. of Recommendations: 5
BRK is expensive and underperforming (as I predicted).
BRK next 15 years will be worse than last 15. This cult will disintegrate.
S&P is resilient and has a long track record. Today it is NVidia, tomorrow it may be OpenAI.
Occams razor.
Dollar cost average. Sleep well. Enjoy life.
No. of Recommendations: 20
He's just trolling.
Try 25 years for a bit of fun:
SPY +550%
BRK.b +1160%
With SPY not staying + till late in 2011.
Feels a lot like 2000 right now.
CAPE now 38.6, same as October 2000, but this time is different...
https://www.multpl.com/shiller-pe
No. of Recommendations: 9
almost as predictable as the current selloff are the comparisons to the SPX when it is in favor of the SPX
No. of Recommendations: 6
He's just trolling.
Nah, it's a reasonable thing to look at, always remembering that no single pair of dates is going to be very informative.
Looking at the longer term, my estimate is that the S&P 500 is about the same valuation level as it was around the start of May 1998, based on smoothed real earnings yield, so the rate of return is presumably equal to the rate of value generation and there is no need to speculate on whether the market is overvalued these days. That return turns out to be spot on 10.0%/year, before inflation. It's 7.25%/year after inflation, a good stretch overall. (could be an overestimate because the recent upswing in net margins may not be entirely sustainable, but let that pass...)
Berkshire's total return is the same as that of SPY since the start of June 1998, almost the same date, so almost exactly the same rate of return.
So, same return for both for this pair of dates, the S&P is neither cheaper nor more expensive, but Berkshire is a fair bit cheaper that it was then. P/B 1.48 now, 2.52 back then 29.26 years ago. The valuation slide is probably a bit more than the -1.8%/year that implies, because book per share was probably a slightly optimistic metric of value in 1998.
Jim
No. of Recommendations: 24
Ugh. One of the reasons I wanted to get off the Motley Fool board was because of this constant, unproductive, repetitive, uninformative discussion. Now since no one is engaging with the two dominant posters on that board anymore, the same old thread is coming to this board to get attention. I know everyone has to make their own choices about what posts they engage with. But between all the political posts and now this thread, there seems to be no escape. Sigh.
No. of Recommendations: 2
Apart from being so endpoint dependent, total return graphs and associated numbers are visually deceptive:
Two equities, A and B, that perform the same except that A had an early upblip, easily leads one to conclude from the charts that A consistently outperforms B because the A curve is visually obviously 'better' (i.e. consistently above) the B curve for a long time.
My preference is to graph rolling returns of A and B on the same plot, using time periods of interest for the rolling return. If 1 year, 3 year, 5 year, 10 year returns are of interest, then make four such plots.
Also, separately plotting the *difference* of these rolling returns gives a clear picture of who over/under performs who over what time periods.
It's a bit more work, but it's your money, so you're free to invest however you wish. Some like chicken entrails.
No. of Recommendations: 1
Welcome back! Your timing is impeccable.
No. of Recommendations: 6
Apart from being so endpoint dependent, total return graphs and associated numbers are visually deceptive:
Two equities, A and B, that perform the same except that A had an early upblip, easily leads one to conclude from the charts that A consistently outperforms B because the A curve is visually obviously 'better' (i.e. consistently above) the B curve for a long time.
My preference is to graph rolling returns of A and B on the same plot, using time periods of interest for the rolling return. If 1 year, 3 year, 5 year, 10 year returns are of interest, then make four such plots.Be sure to use the total returns which include dividends reinvested, not price-only.
Also graph using Logarithmic scale, not linear.
With Logarithmic scale, the slope is the percentage return. Whichever line is the steepest is the one with the higher return.
testfol.io shows all this. BRK-B vs. SPY
https://testfol.io/?s=dcSrHsOPnC7 The slopes from 2009 are almost identical.
Then look at the "Rolling Metrics" tab. Default is 5 year (60 month) rolling CAGR. Very similar except that BRK tends to be equal or better than SPY. Except for 2025 where SPY soundly beats BRK.
No. of Recommendations: 1
He's just trolling.
He can post this same information every month here….again, and I still like my Berkshire! If you’ve had the majority of your net worth in either choice for the last 28 years, it becomes a meaningless number. The no dividend policy has left me with a massive government tax deferred loan (that makes this hombre very happy 😃)
No. of Recommendations: 1
Hi divs nice to see you.
Remind us in what year did Buffett first tell us to compare brk to spy on like a 5-year rolling time period? Thank you.
No. of Recommendations: 4
Yep. I'm more than 35 years. Sometimes for kicks I peak at the cost basis. Hilarious
No. of Recommendations: 3
"Yep. I'm more than 35 years. Sometimes for kicks I peak at the cost basis. Hilarious"
--------------------------
Yes, & several of the posters here are old enough (& lucky enough) to have first "Seen The Light" in the early 90's,(~14%/yr to date).
We have also been handcuffed by Washington, & in my case Sacramento, to Hold The G..D... Stock!
This has no doubt been a blessing in disguise (for me) however, I also wonder what the returns would have been if taxes were not an overriding consideration.
I ask myself, If I was as "savvy" as Mungo & taxes were not a concern, what would the account look like today?
Only Jim can make an estimate & I would love to know his answer!
ciao
this the first article I read on Warren Buffett & led me to "see The Light"
https://fortune.com/2012/11/21/should-you-leave-it...p.s. I was able to get to the article without a paywall thru Perplexity
No. of Recommendations: 16
taxes were not a concern, what would the account look like today?
Only Jim can make an estimate & ...
Probably much like my result: the more you invested in other stuff, the worse your overall portfolio performance! Over time the the average person isn't going to do better picking individual securities. Had the taxes not stayed your hand in reallocating some Berkshire money to other things, my guess is that you'd have done worse overall. So, yeah, I'll vote for the "blessing in disguise" theory.
I have done extremely well on my Berkshire stuff both because of and in spite of my active trading habit, in the vicinity of 25%/year average return on average dollars at risk for 24 years. But that has to be tempered with the observations that (a) I have done a lot worse on average with my other stuff, so I can confirm non-Berkshire stuff is hard (b) I used a lot of leverage (primarily uncallable leverage in calls) that others wouldn't feel comfortable with, and (c) no doubt some large portion is luck. My habit of buying low and selling high has worked on average, but it might not have. And Berkshire has done wonderfully for ages, but that was not the certain foregone conclusion that I and many others wagered it would be.
Jim
No. of Recommendations: 11
Be sure to use the total returns which include dividends reinvested, not price-only.
Also graph using Logarithmic scale, not linear...Good advice. Everything should be inflation adjusted, too.
But even a graph that is crude and breaks the rules can express a useful amount of information. Though inflation adjusted, this one isn't semilog and it's not adjusted for dividends, so it's purely a "value of the index" discussion. Still, it speaks to me.
http://www.stonewellfunds.com/BRKandIndexValueGrow...This one is along the same line, but messier. The intended observation is that the warm colours have done a lot better than the cool colours. It's inflation adjusted and a lot graph, but doesn't concern itself with S&P dividends, so again it's just a "value of the index" thing.
http://www.stonewellfunds.com/BerkshireAndSpyValue...Jim
No. of Recommendations: 15
There's nothing more pleasing to read than someone who mentions his luck as to past investment results and such things as the more I invested in other stuff...and so on as to doing less well. At least for me it makes for a rare online trust building that you'd wish to find more of.
Being overweighted insurance brokers and railroads was a gift from someone for me yet the rails and now with the insurance cycle turning my every dog has his day is likely passed...actually surely passed. The experience with Meta and Fairfax was a gift from the COBF board although I had been in those things for a long time.
And somehow someway the DG world? Be right long enough and you'll be asinine wrong. I did try to conjure up some DG discussion when the world looked to be ending. I personally ended up with good buy price with a whopping 300 shares. The real story is that if we were really good we would have knocked a home run with that stock.
Am I really a good investor? Give me time and I'll prove to be an indexer at best.
No. of Recommendations: 0
BRK: 475%
S&P: 650%
I told you so.
No. of Recommendations: 6
Div, care to share what your returns have been on Upstart Holdings (UPST)? For those who have not followed it take a look at the long term chart (ouch) and you can pretty much guess the time frame where he was buying/pumping it. "Analysts" appearing on CNBC were touting that it could be a $1000 stock. Poor Div fell for it hook, line, and sinker.
No. of Recommendations: 2
Hi Dealraker -
Since you've written about these names a number of times in the past, and are a long-time holder, I would love to hear your thoughts on macro or micro issues affectig AJG and BRO.
Both have experienced signfiicant pullbacks over the past few months - above and beyond what has been typical for them.
Anything that you are concerned about from a fundamental perspective? Both have been granted high multiples by the market, until just recently - but even after some pullback the forward PE shows as 25...
thanks
No. of Recommendations: 0
Div, care to share what your returns have been on Upstart Holdings (UPST)? Sure. UPST has been a 8x return for me.
First buy was $256. Last buy was large number of $2.5 leaps when stock was down.
Stock took off and today is $68. It will do well if rates go down.
I posted updates here as it happened.
https://discussion.fool.com/t/15-years-chart-spx-v...
No. of Recommendations: 8
Howdy river valley:
My two cents worth and it will be generalized as this stuff is multi-dimensionally (probably not a word but...) complex...of course insurance rates of this and that are cyclical thus changing and there is caution in the air.
The fast growers BRO and AJG have pulled back (their stock prices have fallen) with less organic growth predicted. Anything deeper than that? Not that I know of, both have made many and big acquisitions and those are under process of being integrated. Decent buys? Most likely in my view. My guess in the near term AJG - the business - will do better and that may, or may not, mean the stock does better (from around the $285 price). I bought some more BRO in the just under $92 price. I have 62,500 shares of AJG so not likely that I will buy more at any price. (By the way I stated that I had 62,500 shares of AJG on the Yahoo (I think it was Yahoo) forum in 1996 or so...and couldn't get one single soul to discuss it with me! It was worth $500-600k then.) I've continued to plug for the brokers now on the Berk forums for 30 years.
MMC, the stock, is messing around $200 which is probably a decent place to buy if you are wanting to outpace a Treasury bond with what should be little risk. Growth? My guess better than Mr. Market thinks, but not too fast.
I bought WTW again (I loaded up more a year or two ago just under $200) at around $300 and my guess is it will get back there. Decent buy? I certainly think so as things are beginning to click with them.
AON? I bought a whopping amount recently at $330-something and more at $351 or so. Very international...I like it.
We have a great insurance brokers thread over on COBF that may be worth following if you want.
Rambling. I do not think deeply about the brokers but we have detailed in-the-business people on COBF who do if you are interested in their intense analysis.
No. of Recommendations: 1
Appreciate your perspective! Will check out the COBF discussion too. You've mentioned it before - and this sounds like this topic is a good reason to visit.
