CNBC put together a nice piece comparing Berkshire Hathaway (BRK.A, BRK.B) versus the S&P 500 over the years. This table below compares the performance year-by-year and it shows some amazing years of underperformance and outperformance.
For example, in 2009, Berkshire lagged the index by nearly 21%. That was not the worst year though. That distinction belongs to 1999, a year in which Berkshire fell by about as much as the index gained. Yikes.
There were years of outperformance as well obviously. For example, in 2007, Berkshire beat the index by more than 25%. It also outperformed in 2006, but to get the good years of 2006 and 2007, investors had to endure three years of subpar results in 2003, 2004 and 2005.
Getting back to 1999, a good question I ask myself is this, ‘Could I have hung in there during 1999 when Berkshire fell by nearly 20% while the S&P was up almost 20%?’ I did not own Berkshire in 1999 so I cannot say what I would have done, but it would have been rough. I did own Berkshire last year and I am still in it and I am considering adding a bit more.
By the way, another way to participate in Berkshire would be to invest in one of the mutual funds that own it such as Sequoia Fund [SEQUX] or Bruce Berkowitz’s Fairholme Fund [FAIRX].
Disclosure: Kurt Brouwer owns Berkshire Hathaway (NYSE:BRK.B)