Post #11997 by rayvt on the Berkshire Hathaway board

Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤

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If we had owned BRK and SP500 in equal parts in a port since 1950, would not cap weighted strategy have outperformed equal-weighted strategy? I guess this is a question I should do the tests to back test, but I'm guessing you know the answer already.

I have read a number of papers on rebalancing, including studies on the "best" rebalance period.
Which study claimed that the optimal time between rebalances is somewhere between 7 years and never.

Which intuitively makes sense. To rebalance you sell winners and buy losers & also-rans.

Anyway, it was easy enough to run your backtest. 50/50 S&P500 and BRK-A. Limited by BRK inception of 3/17/1980.
One portfolio never rebalanced, one annual rebalance.

Starting with $10,000, the B&H grows to $13.5 million, the annual rebalanced grows to $7 million.
CAGRs 17.4% vs. 15.7%

https://testfol.io/?s=iBPXwJqMie9

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