Seeking Alpha
Registered investment advisor, macro, ETF investing
Profile| Send Message|
( followers)

Investors in Berkshire Hathaway (NYSE:BRK.A), (NYSE:BRK.B) and the rest of the market alike eagerly await each year's letter from Warren Buffett to his shareholders. The Oracle of Omaha has delivered astounding returns for his investors over the last 50 years. Since 1990 alone, the A-class shares of BRK have risen over 2000%, while outperforming in bull markets and bear markets with a consistency that you just don't see anywhere else. Buffett invests strictly for the long term, and doesn't even glance at returns measured in days, weeks, or months. He's famous for his lack of interest in the day-to-day prognostications of market commentators, but isn't above complex derivative trades that take advantage of mis-pricings in those markets, like the extremely long-dated put options he sold to numerous banks in 2007.

For traders that do focus on the short run, we put together the below table of BRK returns following the release of Buffett's letter. We used BRK B-class shares to determine the returns. While Berkshire shares pop 76% of the time following the release of Buffett's annual letter, and beat the S&P 500 by an average of 57 basis points on those days, they don't do as well over the following week. Berkshire is down almost 40% of the time 5 trading days after Buffett delivers his news to shareholders, and actually underperforms the S&P by 20 basis points in those periods. Below is a full table of returns for BRK-B shares following Buffett's newsletter release dating back to 1997.

If you'd like to read the most recent Buffett letter, it should be published here on Saturday morning.

Source: Buffett's Latest Letter Drops This Weekend