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Berkshire Hathaway: Everyone Has Misunderstood What Warren Buffett Is Doing


  • An update on performance of Berkshire Hathaway since my March article.
  • A review and analysis of the Q1 2020 operating results.
  • My notes and takeaways from the 2020 Annual Shareholder’s Meeting.
  • Calculating the Intrinsic Value of Berkshire Hathaway.

Image by Exileofthemainstream

In the business world, the rear-view mirror is always clearer than the windshield.

- Warren E. Buffett


In my first article, Capitalizing on the Correction, published amid the stock market sell-off on March 4th, I detailed five companies that I thought had a favorable risk/reward long-term among the market chaos.

In hindsight, I was slightly overzealous in the situation. COVID-19 anxiety grew, and the market continued to sell-off until March 23rd. I based my analysis upon the situation in China and other Asian countries that had dealt with COVID-19 well, and the stock markets responded accordingly with minor drawdowns of 15-20% similar to where the various recommendations had fallen by on March 4th. However, we soon learnt:

  1. The data from China was/is less than accurate.

  2. The virus had already spread beyond what testing at the time had shown in the United States.

  3. More and more countries began reporting first cases of COVID-19.

  4. The health systems in various countries could not handle an exponential increase in COVID-19 cases that some scientists projected.

  5. The Government response to flatten the curve meant enforcing partial or full economic shut-downs in over 100 countries around the world.

A combination of these factors contributed to the S&P 500 (SPY) falling -35% by March 23rd. Other contributing factors were obvious margin calls, unwinding of risk parity trades, and last, Saudi Arabia and Russia starting an oil price war (as discussed in my second article Resolving the Mexican Stand-off in Oil Markets today).

It's been approximately two months since my first article and this how the five stock recommendations have performed:

ChartData by YCharts

In one word - Abysmal.

First, I apologize if anyone followed me directly on my analysis. Second, though most of these are underperforming the S&P 500, I didn't recommend them for

ChartData by YCharts

ChartData by YCharts

ChartData by YCharts

ChartData by YCharts

This article was written by

Unconventional Ideas, Random Musings, And Meditations About: Work, Life And Business.Stay in touch by subscribing to my blog here. I’ll be setting up a weekly newsletter shortly to share knowledge and discoveries. Follow me on twitter and Instagram.

Analyst’s Disclosure: I am/we are long BRK.B. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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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