Profiting from Patience – Bullish America, Bullish Berkshire & Bearish the Index:

Profiting from Patience – Bullish America, Bullish Berkshire & Bearish the Index:

  • Similar to the peak of 2000, Warren Buffett & Charlie Munger have come under scrutiny, have they lost their touch?
  • As documented by CNBC, Berkshire has underperformed the S&P 500 Index over the last 10 years by 70%
  • If you had invested $1 in Berkshire and the S&P 500 in 1995, by the peak of the internet bubble you would have had $2.26 and $2.93 respectively, an underperformance of ~70% (sound familiar?)
  • Roll the clock forward three years after the bubble broke, so 1995 – 2003, your $1 in Berkshire would now be just shy of $3 while your investment in the index would have fallen to $2.04!
  • Over the last decade, $1 invested in Berkshire left you with $2.88 today vs. $3.56 had you invested in the S&P 500

As Kailash has documented extensively over the last two years (here, here and here), we fully expect an outcome similar to the bursting of the internet bubble with Berkshire marching higher while the broad index rolls over. 


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