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BRK-A Vs. SPY

Jan. 30, 2015 1:10 PM ETSPY, BRK.A
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BRK-A is a publicly traded stock on the NYSE which represents Berkshire Hathaway Inc., a conglomerate company with subsidiaries such as GEICO, MidAmerican Energy, Fruit of the Loom, and Dairy Queen among many others. The Chairman, President, and CEO is legendary businessman and investor Warren Buffet.

SPY is an Exchange-Traded Fund sold on the NYSEArca that is made up of a large blend of the S&P 500 index.

BRK-A opened its first month in March of 1980 at $290, and has since grown to be worth $219,998 per share (a 75,761% increase). In the past 10 years alone, it has grown 150%.

SPY opened its first month in January of 1993 at $43.97, and has since grown to be worth $201.99 per share (a 359% increase). In the past 10 years alone, it has grown 66%.

According to Forbes.com, Berkshire Hathaway Inc. is the 5th largest company in the world, and it's leader Warren Buffet, is the 2nd richest person in the world, being worth a noted 71.3 billion dollars.

If I were recommending to invest between the two, the numbers say that one should buy shares in BRK-A over SPY. There are two problems with this, one being that the per share price is an extreme amount of money. No ordinary person can afford this, but if they were able to it would be a solid investment as history has shown. The other issue, lies within the age of legendary leader Warren Buffet. He is 84 years old, so it would certainly seem like he will no long lead this company within the next 10 or so years. It may still remain a very fast grower and it may still be a good choice after he steps down, but there is also a chance of new leadership not being as successful. Until then, however, I would highly recommend someone to invest in BRK-A if they had the means to do so.

SPY is an investment that I can recommend to someone who wants to build wealth in the long term, and does not have the financial means to invest in something such as BRK-A. It has proven to be a consistent grower, and the future growth of the U.S. economy and the S&P 500 appear promising. I recommend SPY to a low or mid-level investor who wishes to build stable long term wealth.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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