This bot needs to have it's plug pulled and preferably soon.
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Another way to look at it, rather than just capital share/index price, is that neither the SP500 nor BRKa pay dividends, per se. Invest in a SP500 index linked fund, vs BRKa and it's clear which is winning. BRKa is winning, over the short, medium and longer long term.
So taking the entire 500 companies combined, in the SP500 and comparing it to just one company, BRKa, on capital share price vs index alone, is valid. BRKa has smashed the capital index comparison.
But, comparing BRKa that doesn't pay dividends, against 500 of the largest companies in the USA combined, including their dividends, it's remarkable that BRKa is even close to those total shareholder returns. Just a few 10ths of percentage points either way.
Remarkable.
The only difference, in real terms, is that if you owned some of every one of the 500 companies in the SP500 (which is not realistic) and got their dividends as well as unrealised capital gains, you'd be doing a little bit better than EPS on BRKa.
500 companies combined, capital unrealised gains + dividends, versus one company BRKa that doesn't pay dividends, and it's neck and neck. Only a few 10th's of percentage separating them.
That's what Barrons are suggesting. An impossible investment proposition, unless maybe you're a massive fund. Certainly it's impossible for an average investor.
Yes, but the 500 companies are dramatically underperforming Berkshire and always have, they are just currently getting more votes but weigh much less.
Its all multiple expansion that's done it. The SP500 trades around 20 x vs BRK at around 13.
Berkshire EPS growth is far higher. Accounting is much better and far less write downs, dumb buybacks and equity going to insiders.
And isn't another problem that the Index is a constant, but the constituents are dynamic. BRKa doesn't get the benefit of comparison against companies that either fail absolutely (eg Signature Bank) or perform sufficiently poorly to drop out of the Index over time and be replaced, because you are always measuring vis-a-vis the Index.
When the Craft Breweries, Wineries & Hospitality outfits start feeling the pinch, falling over and getting sold at fire sale values then there would appear to be a large problem out there ..
https://www.nzherald.co.nz/business/...BDGRDKBFZIBRE/
Brothers Beer put into voluntary administration
How many is that in craft beer / wine line including likes of Good Spirits being hocked off at less than loans value ?
A sure sign of things getting tougher