Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
No. of Recommendations: 6
Since 3/12/2020 through yesterday:
BRKB 23.1% average annual return
SPY 19.53% average annual return (with div reinv)
Not bad!
No. of Recommendations: 2
there was a poster on the MF board named div20 or something like that who would constantly pound the table of BRK being inferior to the S&P.
No. of Recommendations: 2
" there was a poster on the MF board named div20 "
div20 is still on the fools board. Over the years I still saw toddfinances, beachlawyer, webrules, that really old guy passed, can't think of his name, but he was very nice and texted me often, and a few others. Hopefully they all moved to the Mag7!
No. of Recommendations: 4
webrules = rational walk
The amount of talent on the Yahoo BRK.A board was incredible.
No. of Recommendations: 6
Rational Walk is a great resource on many levels
I went back 10 years and Berkshire beats the market as well with dividends reinvested
Doesn't quite beat it on 15 years
Since 3/4/2011 through yesterday, Berkshire 13.5% versus 12.99% on the SPY- obviously the SPY has tax consequences attached to it
This exercise does not prove anything about the future, what it shows is starting points matter and data can be manipulated to be made to look a certain way
No. of Recommendations: 3
there was a poster on the MF board named div20 or something like that who would constantly pound the table of BRK being inferior to the S&P.
There were two stocks they asserted would be 10 baggers. Quantumscape (QS) and Confluent (CFLT). I bought some of each in the paper trading account I used for strategy testing. After holding them for years, both were down over 50% from my purchase price when I finally got rid of them a few weeks ago.
No. of Recommendations: 3
To be fair to Divi (Dividends20) he very especially constantly pounded the table for T., the stock whose name nobody here could hear anymore (longer term posters know). Since he did this Tesla indeed became a 10 bagger (still is a 5 one).
Let's be fair.
No. of Recommendations: 3
The question Divi20 would never answer was what were his assumptions for the S&P in terms of earning growth and/or multiple expansion that would occur for the index to beat BRK. Would the earnings of the entire index soar? BRK earnings tank? P/E ratios grow to the sky? He had what WEB termed "the Tinkerbelle Approach", clap if you believe. The last time I posted the whole lot of stragglers back there accused me of just regurgitating what Jim spouts, and weighing the credibility of the posters on the two boards, I left.
No. of Recommendations: 10
To be fair to Divi (Dividends20) he very especially constantly pounded the table for T., the stock whose name nobody here could hear anymore (longer term posters know). Since he did this Tesla indeed became a 10 bagger (still is a 5 one).
Let's be fair.
Credit where credit is due indeed, but sometimes it is better to be lucky than good. TSLA has P/E of 113 and a PEG ratio at 8.8, if my math is correct. That is extremely aggressive pricing.
Just throwing some spaghetti here...if the P/E were to drop to 20 in say six years, that implies earnings would grow at a 33% CAGR with no increase in price. That's a heavy lift. Sales were down a bit last year and EPS was down a lot. I'm guessing sales and EPS are going to be down again in Q1.
No. of Recommendations: 27
I'm posting to suggest a way of looking at BRK/B versus SPY over time.
Go to stockcharts.com. At the top of the page under charts, scroll down to perf charts. Enter BRK/B,SPY
When the chart pops up, click on the scroll line at the bottom of the chart. It will enable you to compare performance, with reportedly dividends included, over time. Slide it to the left and watch the red line (BRK) compared with the blue line (SPY). At the upper left of the chart you can see the start days when the SPY crosses above the BRK line. There aren't that many.
If you scroll all the way to the left - beginning of 1999 - BRK outperforms, as it does during most periods up to now.
So you can pick your start date and make any story you wish. But, over time, and even with the "Mag 7", BRK has usually been the better investment. And without any tax impacts if you just buy and hold. That would further tilt the odds a little towards BRK.
I find this the easiest way to actually judge relative performance over time. Quick and easy. Look at the whole time period.
No. of Recommendations: 5
Go to stockcharts.com. At the top of the page under charts, scroll down to perf charts. Enter BRK/B,SPY
When the chart pops up, click on the scroll line at the bottom of the chart. It will enable you to compare performance, with reportedly dividends included, over time.
Thanks, Texirish. This is great. One comment: I found that nothing happened when I checked and unchecked "Adjust For Dividends." However, when I switched the two and made SPY the "main chart symbol" and BRK/B the "comparison symbol" (i.e., "SPY,BRK/B"), then checking and unchecking "Adjust For Dividends" actually worked.
No. of Recommendations: 0
That is excellent Tex,thank you, had no idea you could do that, $SPXTR is the spy with div reinvested automatically
No. of Recommendations: 6
The question Divi20 would never answer was what were his assumptions for the S&P in terms of earning growth and/or multiple expansion that would occur for the index to beat BRK. Would the earnings of the entire index soar? BRK earnings tank? P/E ratios grow to the sky?
That's the part I got tired of. The observation he objected to was:
SPY: Price expanding faster than the valuation.
BRK: Price not expanding faster than the valuation.
So if you believe in the weighing machine, the latter is the better investment. The overarching theme of this board over two decades (thanks largely to mungofitch) has been sometimes BRK is a great value, and sometimes it isn't. Divi never picked up on that nuance.
No. of Recommendations: 6
The overarching theme of this board over two decades (thanks largely to mungofitch) has been sometimes BRK is a great value, and sometimes it isn't.
Right now it isn't. But it is encouraging that BRK has only pulled back a little bit from the recent and alltime high, whereas the S&P500 has taken it in the ear.
No. of Recommendations: 3
Credit where credit is due indeed, but sometimes it is better to be lucky than good. TSLA has P/E of 113 and a PEG ratio at 8.8, if my math is correct. That is extremely aggressive pricing.
This is your/our line of thinking. Divi´s thinking was different, he would have called this "old school, hopeless, not seeing that Tesla is much more than just a car company ... battery company ... intellectual property ... vision ... potential ... future synergies ...".
This is a different way of thinking. I am far from defending it. Actually I was the one that constantly mocked him and repeatedly challenged him to a longterm bet on longbets.com about Berkshire versus Tesla (a challenge he conveniently ignored).
But it's a kind of relativism to apply your/our thinking to dismiss that he actually was right with Tesla, to say: "Because that price according to my thinking is not justified Tesla having been a 10-bagger MUST have been luck" --- this is just an expression of our view, our narrow thinking, not necessarily reality. The fact we know is that he was right.
No. of Recommendations: 2
Credit where credit is due indeed, but sometimes it is better to be lucky than good. TSLA has P/E of 113 and a PEG ratio at 8.8, if my math is correct. That is extremely aggressive pricing.
For companies that have easy access to capital (either through retained cash flow or the ability to sell inflated shares) the P/E ratio is not the most useful metric. I personally find TSLA "too hard" to figure out; some thoughts were recently shared on the Falling Knives board.
tecmo
...
No. of Recommendations: 0
For companies that have easy access to capital (either through retained cash flow or the ability to sell inflated shares) the P/E ratio is not the most useful metric
Very true for individual companies, but this tread, as did the past discussions with div20, involved the entire S&P500. I would never claim any confidence in predicting the direction of a single new fast growing stock, but when comparing BRK (basically an index of companies with stable strong cash flow)vs. the S&P, P/E matters. Our old friend Div20 kept telling us the Teslas of the world would drive the index, but even in the era of the mag 7, the price paid for earnings of the other 493 companies matters.
