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Friday, I bought back most of the calls I was short when brkb broke 480. The calls lost 85-90 % of their value so quickly I would rather be free to sell them again IF the stock trades back to 500ish. I hope up 20 to 500 is a big favorite over down 20 to 460, but so many unforced errors have been made the past year it's very hard to be confident.

In Beckys two hour special I did hear one comment that was worth the two-hour waste of time, BUT I still have no idea how Abel thinks about several critical issues. We all know how posts questioning Buffett have been treated the past 30 years, so I won't go there.


How pathetic and embarrassing is it that the article shared by MD got one rec, just me? That says it all, stay safe if you live in the states getting blasted!

An issue I've raised for 15 years,

"
This is where the legend of Buffett’s genius rightly springs. What is less well known, however, and even less discussed, is that these first five decades account for more than 100% of Buffett’s career outperformance. While he beat the S&P by a factor of almost 500 in his first fifty years, he has underperformed it in the eighteen years since. As the chart below shows, a million dollars invested in the S&P from the end of 2007 through mid-December 2025 would today be worth $6.6 million, almost 25% more than the $5.3 million you would have earned in Berkshire’s stock."

An issue I've raised for 15 years,

"
This is where the legend of Buffett’s genius rightly springs. What is less well known, however, and even less discussed, is that these first five decades account for more than 100% of Buffett’s career outperformance. While he beat the S&P by a factor of almost 500 in his first fifty years, he has underperformed it in the eighteen years since. As the chart below shows, a million dollars invested in the S&P from the end of 2007 through mid-December 2025 would today be worth $6.6 million, almost 25% more than the $5.3 million you would have earned in Berkshire’s stock."



Yes, though you don't usually indulge in such blatant cherry picking of start dates : )

Berkshire was extremely optimistically valued around December 2007. P/B was 1.828. Three months earlier it was at 1.59, and it was at 1.63 just a couple of weeks later.

It's generally true that Berkshire and the S&P 500 have had extremely similar market returns for about the last 24 years. If you don't cherry pick dates, it's a tie for most intervals. But as is well known, Berkshire has done that by seeing its shares getting more valuable, and a bit cheaper on trend. The broad market has done it by getting a lot more expensive, and not growing in value as fast. The S&P 500's multiple of smoothed real earnings has risen a rather remarkable 2.498%/year, compounded, since end 2007.*

So anybody who knew in advance that, for some inexplicable reason, the broad US market was about to become more and more and more expensive, good for them. For those who were merely along for the ride and got lucky (essentially everybody owning the S&P), I don't think there are any bragging rights to be had.

And even the lucky folks aren't that lucky if they don't sell before the next secular bear. A possible aphorism: any price rise beyond the rate of value growth will unwind.

Jim

* Would the following line of reasoning be outrageous: Given that the broad US market has become more expensive by 2.5%/year for 18 years, it seems theoretically possible that it could get 2.5%/year cheaper for 18 years?

“How pathetic and embarrassing is it that the article shared by MD got one rec, just me? That says it all, stay safe if you live in the states getting blasted!”

You mean the Fortune article behind a paywall?

So anybody who knew in advance that, for some inexplicable reason, the broad US market was about to become more and more and more expensive, good for them.

In hindsight, the reason is not inexplicable.

Profit margins have steadily increased and doubled since the turn of the century. As a result of this trend and in anticipation of this trend continuing, market participants have been willing to steadily expand P/E multiples as well.

It's possible that someone could have come up with a theory that posited this in advance. For example, until rates began going up in 2022, we were in a decades long bull market for bonds. Lower interest rates means less interest expense and in turn higher profit margins. Point being broad US market becoming more and more expensive is not completely random. There are ties, however tenuous, to economic reality.

In hindsight, the reason is not inexplicable.

Profit margins have steadily increased and doubled since the turn of the century. As a result of this trend and in anticipation of this trend continuing, market participants have been willing to steadily expand P/E multiples as well.

Sorry, but that doesn't explain it. If profit margins increased, then the E in the P/E increased. That justifies an increase in P, but not an expansion of the P/E ratio. It could explain an expansion of P/S (price to sales) but not of P/E (price to earnings).

Elan

" You mean the Fortune article behind a paywall?"

AdrianC, would you like me to send it to you? Do you have a library in your city? If you own brkb its worth reading.

" he has underperformed it in the eighteen years since. As the chart below shows, a million dollars invested in the S&P from the end of 2007 through mid-December 2025 would today be worth $6.6 million, almost 25% more than the $5.3 million you would have earned in Berkshire’s stock."



Yes, though you don't usually indulge in such blatant cherry picking of start dates : )"


Jim, what are the results for the past 15 years ending 12/31/2025? Thank you.

So anybody who knew in advance that, for some inexplicable reason, the broad US market was about to become more and more and more expensive, good for them. For those who were merely along for the ride and got lucky (essentially everybody owning the S&P), I don't think there are any bragging rights to be had.

I am less dismissive of those who have achieved success investing in the index. For the past 15 years there has been non-stop commentary about how the index is overvalued. In the face of this relentless convincing negative commentary, those who nevertheless continued to dollar cost average into the index, year after year, decade after decade, and never sold, deserve kudos and I would say have definitely earned bragging rights. Being able to do this and not be shaken out along the way is not small feat, and cannot be attributed to just pure luck. It requires a well thought out investing framework. It's a decades long bet that when you sell far into the future during retirement, again over time, you will on average realize a pleasant positive real return. Once you realize this key insight, it becomes easier to ignore the valuation commentary even if justified.

Jim, what are the results for the past 15 years ending 12/31/2025? Thank you.


In the 15 years just ended Jan 23, the S&P 500 total return (before dividend tax) beat Berkshire's price by 1.32%/year.
(Berkshire's price rose 12.64%/year, and known book per share rose 11.82%/year, both figures without inflation adjustment)

That's just one specific pair of dates, of course. For exact 15 year intervals ending on any date between the start of last year and today, you get a difference ranging from advantage SPY 2.12%/year to advantage Berkshire 1.06%/year. Not much in it either way.

As is pretty well known, the S&P has done pretty well in the last few years. Almost scarily so, depending on your philosophical outlook.

Jim

" That's just one specific pair of dates, of course. For exact 15 year intervals ending on any date between the start of last year and today, you get a difference ranging from advantage SPY 2.12%/year to advantage Berkshire 1.06%/year. Not much in it either way."


Thanks bud but let's keep it simple. For the ten years ending 1/1/26 with divs reinvested, spy vs brkb, the charts I have may not be divs reinvested. IF brkb was within 2% of spy while being so underweight tech the past 10 years that's very impressive. Thank you.

For the ten years ending 1/1/26 with divs reinvested, spy vs brkb, the charts I have may not be divs reinvested. IF brkb was within 2% of spy while being so underweight tech the past 10 years that's very impressive.

Try this:
https://testfol.io/?s=75yrp6CYFAg

Berkshire is ahead most of the time, except just before COVID and the COVID recovery (when Berkshire hunkered down and got no respect for it), and the last half of 2025.

Just a reminder, thank you, you are very welcome. :)


Author: hclasvegas 😊 😞
Number:
18423
of 18610
Subject: brkb and the calls, for those with an interest,
Date: 01/24/26 9:35 AM
Post Reply | Report Post | Recommend It!
No. of Recommendations: 0

Friday, I bought back most of the calls I was short when brkb broke 480. The calls lost 85-90 % of their value so quickly I would rather be free to sell them again IF the stock trades back to 500ish. I hope up 20 to 500 is a big favorite over down 20 to 460, but so many unforced errors have been made the past year it's very hard to be confident.

In Beckys two hour special I did hear one comment that was worth the two-hour waste of time, BUT I still have no idea how Abel thinks about several critical issues. We all know how posts questioning Buffett have been treated the past 30 years, so I won't go there.


How pathetic and embarrassing is it that the article shared by MD got one rec, just me? That says it all, stay safe if you live in the states getting blasted!

An issue I've raised for 15 years,

"
This is where the legend of Buffett’s genius rightly springs. What is less well known, however, and even less discussed, is that these first five decades account for more than 100% of Buffett’s career outperformance. While he beat the S&P by a factor of almost 500 in his first fifty years, he has underperformed it in the eighteen years since. As the chart below shows, a million dollars invested in the S&P from the end of 2007 through mid-December 2025 would today be worth $6.6 million, almost 25% more than the $5.3 million you would have earned in Berkshire’s stock."

"This is where the legend of Buffett’s genius rightly springs. What is less well known, however, and even less discussed, is that these first five decades account for more than 100% of Buffett’s career outperformance. While he beat the S&P by a factor of almost 500 in his first fifty years, he has underperformed it in the eighteen years since. As the chart below shows, a million dollars invested in the S&P from the end of 2007 through mid-December 2025 would today be worth $6.6 million, almost 25% more than the $5.3 million you would have earned in Berkshire’s stock."

We know you don't put much stock in what Buffett has said over the years, but he did warn us. He said outperformance was going to be difficult as Berkshire grew. He was right.

I'm happy Berkshire has done so well. It has more or less kept up with a US stock market that has gotten more and more highly valued, while staying quite reasonably valued itself. Berkshire stock has actually *beaten* SPY over the last 5 years, all the while holding a ton of cash.

https://testfol.io/?s=2LTXX1F4Fwu

16% CAGR. I'll take that.*



* Start/end point matter a great deal with these things...

Save us the time, share the question Buffett put to a vote about a dividend years ago, thanks bud.

Save us the time, share the question Buffett put to a vote about a dividend years ago, thanks bud.

Don't you have google where you live? Sad.

" Don't you have google where you live? Sad."

I was at the park, some of us can live off our dividend income and play all day. Even at home I still can't find it.

Thank you for your attention to this matter.


BTW, a smart guy like you bothers to read me, pathetic,no?

ucmtsu no way.

some of us can live off our dividend income and play all day

It might be better for your health to sell your non-dividend-paying stock rather than griping incessantly to us about it. I know it would be better for mine.

Thank you for giving this matter a break, old buddy, old pal o' mine. ucmstu

Save us the time, share the question Buffett put to a vote about a dividend years ago, thanks bud.

You're welcome.

2014:
“Whereas the corporation has more money than it needs and since the owners unlike Warren are not multi-billionaires, the board shall consider paying a meaningful annual dividend on the shares." - David Witt, a Cincinnati resident.

https://www.cnbc.com/2014/03/17/berkshire-opposes-...

At Q4 2013 Berkshire had Cash + Fixed income totaling 94% of float, 15% of assets.
At Q3 2025 Berkshire had Cash + Fixed income totaling 211% of float, 30% of assets.

Looks like you should propose it, HC. Vote!

" Thank you for giving this matter a break, old buddy, old pal o' mine. ucmstu"

I should disclose rumors that I offered to take brkb private at 550 might not be accurate at this time. :) The 470 and 480 puts I sold last Friday are out of the money for now.

While history majors' dwell on what Buffett said in 1999 I'm looking forward to what Greg has to say, going forward.

Critical thinkers unite, all three of us!

" 2014:
“Whereas the corporation has more money than it needs and since the owners unlike Warren are not multi-billionaires, the board shall consider paying a meaningful annual dividend on the shares." - David Witt, a Cincinnati resident."

Partner, the accrual question, the way he worded it, is in the proxy material. I'm home let's see if I can find it.

" Warren Buffett’s Berkshire Hathaway
has urged shareholders to vote against a proposal that it consider spending some of its $48.2 billion of cash on a “meaningful” dividend."


That's a riot, back then a, "meaningful" dividend would have consumed about 25 % of our cash in two years. WHO would have voted for that?

I’ve always seen Berkshire as ballast in our portfolio, and it looks like we’re nearing a tipping point where its function as ballast in a storm is about to come in handy. Tech stocks are listing and some are taking on water. SaaS stocks are outright sinking. If Berkshire just treads water in a suddenly southern market we will do just fine. Wealth, after all, is just relative. Holding value while the S&P sinks will make you richer.

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