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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
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Author: Aussi ✭  😊 😞
Number: of 15056 
Subject: Re: What’s the better value rn, brk or qqqe?
Date: 05/29/2024 5:18 PM
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If they do, it won't be based on the statistics from deep history. e.g., an equally weighted portfolio of the 5 largest market cap stocks in the S&P 500 underperformed the S&P 500 by about -3.6%/year 1997-2016 inclusive.

I think if you check from the beginning of 1999 to the end of 2013, the underperformance would be even worse than -3.6% per year. However, if you check from 1972 to end of 1998 and from beginning of 2014 until now, about 37 years, the largest market cap stocks performed much better. So yes, market cap weighted does not always perform better, but based on the past 50 years, it has been the way to go to get better returns, but also accompanied by higher concentration in particular stocks.

Aussi
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