Author Topic: One stock to beat the S&P in the next 20 years  (Read 4874 times)

MustacheAndaHalf

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Re: One stock to beat the S&P in the next 20 years
« Reply #50 on: September 26, 2021, 06:59:07 AM »
Berkshire has had an impressive history, and it's CEO Warren Buffet is a legendary investor.  But it has been losing to the S&P 500 for years.  That's even with $116 billion invested in Apple, or between 1/5th and 1/6th of Berkshire's market cap.  If you wanted Berkshire's best idea... wouldn't you just buy AAPL stock?

Consider that Berkshire has done well in tough times, but it's performance for the past 12 months lost to the S&P 500 (QQQ beat them both).  Last year I bought several airline stocks at huge discounts... while Warren Buffet was selling off his airline holdings at significant losses.

The most favorable comparison is the 15 year performance measuring from before the Great Financial Crisis.  By that measure, BRK trails the S&P 500 by 0.25%/year.  Remove that crisis, and the 10 year picture is more bleak: BRK loses by 1.5%/year.  So my comment about BRK doing well in tough times is backed by the data.  But I think BRK didn't take advantage of 2020, and will need to wait for another crisis to even catch up to the S&P 500.

ChpBstrd

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Re: One stock to beat the S&P in the next 20 years
« Reply #51 on: September 27, 2021, 12:44:51 PM »
Berkshire has had an impressive history, and it's CEO Warren Buffet is a legendary investor.  But it has been losing to the S&P 500 for years.  That's even with $116 billion invested in Apple, or between 1/5th and 1/6th of Berkshire's market cap.  If you wanted Berkshire's best idea... wouldn't you just buy AAPL stock?

Consider that Berkshire has done well in tough times, but it's performance for the past 12 months lost to the S&P 500 (QQQ beat them both).  Last year I bought several airline stocks at huge discounts... while Warren Buffet was selling off his airline holdings at significant losses.

The most favorable comparison is the 15 year performance measuring from before the Great Financial Crisis.  By that measure, BRK trails the S&P 500 by 0.25%/year.  Remove that crisis, and the 10 year picture is more bleak: BRK loses by 1.5%/year.  So my comment about BRK doing well in tough times is backed by the data.  But I think BRK didn't take advantage of 2020, and will need to wait for another crisis to even catch up to the S&P 500.

Berkshire isn't necessarily playing for the highest returns. They seem to be playing for the highest Sharpe ratio. According to this metric, BRK.A/BRK.B might "beat" the S&P 500 yet again in the next 20 years, even if the absolute returns are lower. 

MustacheAndaHalf

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Re: One stock to beat the S&P in the next 20 years
« Reply #52 on: September 28, 2021, 08:03:29 AM »
Berkshire has had an impressive history, and it's CEO Warren Buffet is a legendary investor.  But it has been losing to the S&P 500 for years.  That's even with $116 billion invested in Apple, or between 1/5th and 1/6th of Berkshire's market cap.  If you wanted Berkshire's best idea... wouldn't you just buy AAPL stock?

Consider that Berkshire has done well in tough times, but it's performance for the past 12 months lost to the S&P 500 (QQQ beat them both).  Last year I bought several airline stocks at huge discounts... while Warren Buffet was selling off his airline holdings at significant losses.

The most favorable comparison is the 15 year performance measuring from before the Great Financial Crisis.  By that measure, BRK trails the S&P 500 by 0.25%/year.  Remove that crisis, and the 10 year picture is more bleak: BRK loses by 1.5%/year.  So my comment about BRK doing well in tough times is backed by the data.  But I think BRK didn't take advantage of 2020, and will need to wait for another crisis to even catch up to the S&P 500.

Berkshire isn't necessarily playing for the highest returns. They seem to be playing for the highest Sharpe ratio. According to this metric, BRK.A/BRK.B might "beat" the S&P 500 yet again in the next 20 years, even if the absolute returns are lower.
When has Berkshire CEO Warren Buffet ever claimed he's investing for the highest Sharpe ratio?  I've never heard him say anything of the sort.

Buffet beat the S&P 500 for decades, which is an amazing accomplishment.  And he's said he could do it again with a $50 million fund.  But since he has a $600 billion market cap company, he's very limited in where he can invest.  He has to invest billions to matter at all, and has to limit the percentage of a company he owns.  I think he's limited to finding undervalued companies at the top of the S&P 500, which is a very difficult thing to do.  And that's why I think he underperforms recently.  It makes sense for someone who has to invest over $600 billion.

Roland of Gilead

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Re: One stock to beat the S&P in the next 20 years
« Reply #53 on: September 28, 2021, 10:05:40 AM »
SpaceX

thedigitalone

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Re: One stock to beat the S&P in the next 20 years
« Reply #54 on: September 28, 2021, 11:30:43 AM »
SpaceX

Privately held, no?  Guess you could get a job there to acquire some?

BicycleB

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Re: One stock to beat the S&P in the next 20 years
« Reply #55 on: September 28, 2021, 11:34:57 AM »
SpaceX

Cute!

Kind of hard to buy since it's private. But one of the buyers in funding rounds has been Google. So maybe Google?

It looks like the SpaceX portion is only a fraction of a percent of GOOG's market cap, so pretty diluted investment.

Though I did get all this info from my browser. Hmm. ;)

Roland of Gilead

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Re: One stock to beat the S&P in the next 20 years
« Reply #56 on: September 28, 2021, 11:53:22 AM »
It may be they never go public, although the Starlink division might.   

MustacheAndaHalf

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Re: One stock to beat the S&P in the next 20 years
« Reply #57 on: September 29, 2021, 07:29:25 AM »
So maybe Google? ... Though I did get all this info from my browser. Hmm. ;)
That is the most hilarious thing I've read all month!  Thanks for that.

---
https://en.wikipedia.org/wiki/Renaissance_Technologies#Medallion_Fund
Quote
Since 1988, his flagship Medallion fund has generated average annual returns of 66% before charging hefty investor feesó39% after feesóracking up trading gains of more than $100 billion. No one in the investment world comes close.
Scammers don't refuse outside money - and I've personally seen them listed as owning more than 5% of small companies where I also invested.  Most hedge funds charge 20% of performance, not 40%.  It's another hint they are likely the real thing.

No outsider can buy, but what if I figured out their investments and imitated them with a fraction of my investments?  Their SEC filings lack newlines and punctuation, so I rely on other websites for the list, and then finance.yahoo.com for details of their top 3 holdings:
https://hedgefollow.com/funds/Renaissance+Technologies
https://finance.yahoo.com/quote/NVO/
https://finance.yahoo.com/quote/VRSN/
https://finance.yahoo.com/quote/ZM/

taekvideo

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Re: One stock to beat the S&P in the next 20 years
« Reply #58 on: October 06, 2021, 12:20:23 PM »
Microstrategy (MSTR)