Berkshire Hathaway (BRK.B) is starting to look like an index fund, but with greater specific...

Berkshire Hathaway (BRK.B) is starting to look like an index fund, but with greater specific company risk, writes Cullen Roche. He notes the diminishing returns of book value gains relative to the S&P 500 - 14% in Berkshire's first 20 years, 5.6% in the last 20, 3.9% in the last 5. Berkshire is so big, he wonders if it can continue to outperform to a degree outweighing the risks of owning a single holding company.

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Comments (7)
  • pmulqueeney
    , contributor
    Comments (15) | Send Message
    Why don't you focus on return from inception to today? More
    like 19% plus. Articles like this make analysis like this seem
    under researched. PMM
    4 Mar 2013, 03:41 PM Reply Like
  • into dark shadows
    , contributor
    Comments (460) | Send Message
    An index fund?
    I'd say it looks more like a government sanctioned "Insider Trading" vehicle for a fat cat who is as dishonest with regard to his taxes and his secretary and her "Income Tax" liabilities as you can get!
    Why is Buffett above everyone else?
    Why is Jon Corzone allowed to wreck havoc on thousands of peoples lives and livelihoods?
    Where is the standard?
    Where is the ethic?
    There is none with regard to Buffett /Corzine / and the total destruction of the worlds once greatest "Free Market System" that Bernanke and the fed has come out and admitted to supporting, or where I come from its called manipulating!
    Today's action is a classic tell, disgusting, in your face manipulation!
    4 Mar 2013, 04:36 PM Reply Like
  • dunnhaupt
    , contributor
    Comments (2172) | Send Message
    An "index fund" with soft drinks and railroads and car insurance and chocolate and gym shoes and ketchup? I don't think so. But an old-fashioned mutual fund, maybe.
    4 Mar 2013, 08:02 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (6941) | Send Message
    (BRK.B) will never own tech. And probably it won't have many smallcaps, either.
    4 Mar 2013, 08:27 PM Reply Like
  • MrMatt
    , contributor
    Comments (1395) | Send Message
    If IBM isn't a tech company, what is it?
    5 Mar 2013, 06:49 AM Reply Like
  • stevehem
    , contributor
    Comments (2) | Send Message
    Warren himself has said that it's much easier to make money out of small caps than large. It's clearly very difficult to be find a truly mis-priced stock of a size that would be of interest to BRK/A.
    15 Mar 2013, 01:16 PM Reply Like
  • Michael Bryant
    , contributor
    Comments (6941) | Send Message
    Heinz and Burlington Northern Santa Fe were both very large companies that had an edge over the competition. So I think Buffett looks for that: an edge and large free-cash flow when buying companies.
    15 Mar 2013, 01:28 PM Reply Like
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