Berkshire vs. S&P 500

[AzCactus]

I know that Berkshire is pretty large now so outperforming the S&P might be tough, but not quite this tough.  If you look  at a 5 year graph, Berkshire has under-performed by a cumulative 20% over that time frame.  I'm not sure if this means something or nothing, but it was interesting to me. 

[gfp]

I think it mainly reflects the fact that Berkshire didn't decline as much in the financial crisis.  So 5 years captures only the recovery from the crisis price levels on the index.  If you select 4 years Berkshire outperforms.  3 years Berkshire outperforms, 10 years Berkshire outperforms, etc...

[Jurgis]

Not that much outperformance in last 10 or 20 years: http://www.cornerofberkshireandfairfax.ca/forum/berkshire-hathaway/50-years-of-brk-wall-print-%28new-letters-book%29/30/

 

I like BRK at current valuation vs SP500. I might be wrong though.

[Munger_Disciple]

YTD Berkshire has underperformed the S&P 500 index by 11%.

[gfp]

How did you arrive at 11%?  I get something like 8% plus a half year of the SPX dividend yield

 

YTD Berkshire has underperformed the S&P 500 index by 11%.

[ourkid8]

Anyone have any rough calculations of Berkshire's book value?

[Munger_Disciple]

How did you arrive at 11%?

 

It was 11% a couple of days back. As of 6/25/15, total return of S&P 500 index was 3.12% whereas Berkshire was down 7.26% which means that the index outperformed Berkshire by 10.38%.

[gfp]

Anyone have any rough calculations of Berkshire's book value?

 

It depends on how the Heinz write-up is handled.  Last report had Book at about $98 per B share.  Current book could be anywhere from 98 to 105 per B share, but the HNZ deal won't close in the 2nd quarter, so the jump could come in Q3.

[Jurgis]

Both BRK and FFH outperformed SP500 a lot last year, so there is some "reason" for the underperformance this year.

 

OTOH, it might be opportunity to add.

[gfp]

I've been adding as it dips below 140.  Would love it if BRK stayed low as lots of cash comes in from arbs in the next week or so.  BH, DTV, a lot of deals about to close.

[cubsfan]

I added a lot yesterday. Sub-140 looks like a very good price.

 

[Jurgis]

For full disclosure: I own some BRK and I have added recently.

[ourkid8]

I also added under $140 as well...Berkshire is cheap!!!

 

For full disclosure: I own some BRK and I have added recently.