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Purchasers of BRK this century have probably trailed the S&P.🤷‍♂️

Whoops! Never mind.

Yeah, depends on when you bought, of course.

Looking back at my buy/sell spreadsheet (yes, I have a spreadsheet...), my worst lot has a CAGR of 8.9%, which is my very first purchase, 1/5/1999. That's funny. And what's even more funny is those shares are beating the S&P500.

https://stockcharts.com/freecharts/perf.php?SPY,BR...

Best lot is 19.8% CAGR bought 3/23/2020. Those are not beating the S&P500, which surprised me.

https://stockcharts.com/freecharts/perf.php?SPY,BR...

Generally, the lots are 10-14% CAGR, over a decade or two. A fellow can do quite well just buying and hanging on.
Buying when it's quite cheap and hanging on is the sweet spot.

It's possible I would have done better buying the S&P500 at the right times and holding on. Too much work to try to figure that out, and pointless.
I'm happy with my result.

Looking back at my buy/sell spreadsheet...

It's counterintuitive that your worst return is from a purchase that has beat the market, and the best return is from a purchase that hasn't.

But if I think about it a bit more, that makes sense: the broad US market rebounds from lows more than something as boring as Berkshire, which probably didn't drop as much in the first place. One could even make the risky generalization that when the broad market really tanks, it's reasonably likely to be the better returning pick for a while.

This is probably not unrelated to the observation that during the first few weeks an months after a MAJOR market bottom, the stuff that does the very best is the absolute worst companies, the stuff that crashed the most and you'd usually want to short.

Jim

It's possible I would have done better buying the S&P500 at the right times and holding on. Too much work to try to figure that out, and pointless.
I'm happy with my result.

You made me go back and calculate my worst CAGR, which was my purchase around the end of 1998 after the big runup that year. This was my first substantial Berkshire purchase, and I obviously didn't know how to value the stock. I just had some cash and bought it. 🤷‍♂️ I get a CAGR of around 8.8% for that time period, which also handily beat the SP500 index. Very interesting.

I'm the poster boy for not knowing much but just hanging on forever, and as you have shown even when you don't get a great buy in price one can do quite well over the very long haul. My best CAGR has been my purchase in 8/2000 at 10.42%.

I am not sure I would have held on as diligently if I was just buying the index. The "cult" aspect of Berkshire made me hang on, and by going to the annual meetings at times and reading the reports, I sort of knew the business was still doing well even if the stock price was not at times, so it helped me hang on.

You made me go back and calculate my worst CAGR, which was my purchase around the end of 1998 after the big runup that year. This was my first substantial Berkshire purchase, and I obviously didn't know how to value the stock. I just had some cash and bought it. 🤷‍♂️

Same. For the first time I had surplus money to invest. I heard about this Warren Buffett guy and "value investing". I like getting value, so...I bought some. With skin in the game I then did a lot of reading, and learned about price to book and all that. As the stock price went down in 1999-2000 I just kept buying, even getting my girlfriend (now wife) in on the "great opportunity". Cheapest we got are split adjusted $29/share.

I am not sure I would have held on as diligently if I was just buying the index. The "cult" aspect of Berkshire made me hang on, and by going to the annual meetings at times and reading the reports, I sort of knew the business was still doing well even if the stock price was not at times, so it helped me hang on.

Good point. I feel the same.

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