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Berkshire have to drop 99% to match the S & P since Buffett took over


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Posted (edited)

This was in Barrons a couple of weeks ago. Sounds like a great bar bet. I've tried it out on friends and they guess 50-60%....

The math is - Berkshire stock was $20 in 1965; had it compounded like the S & P - 10.2% CAGR- it would be worth ~$4900. But Berkshire has compounded at 20%; and the A shares when the article came out were $490,000.

Voila - it would take a 99% drop to hit $4900. Somewhere I read Buffett had a response to this, something along the lines of "let's not test the math."

Edited by Libs
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