The S&P 500 is on such a tear that even Warren Buffett can't keep up (2024)

Even the Oracle of Omaha, widely considered one of the most successful investors, has not been able to outperform the booming S&P 500 in recent years.

The stock of Warren Buffett’s holding company Berkshire Hathaway has nearly equaled the return of the S&P 500 for the past two decades, according to MarketWatch.


“As Buffett has acknowledged in prior annual shareholder letters, Berkshire Hathaway’s sheer size now makes it much more difficult to find companies that are both significantly undervalued and large enough to make a difference to Berkshire’s bottom line,” writes MarketWatch contributor Mark Hulbert.


Another reason could involve the influence of the portfolio’s co-managers Todd Combs and Ted Weschler, who were hired in 2010 and 2011, respectively. Before that, Buffett managed Berkshire’s portfolio by himself.


Buffet has previously acknowledged the efficiency of the S&P 500. In an annual letter to shareholders in 2013 he said 90% of his wife’s inheritance would be invested in an S&P 500 index fund.

“One bequest provides that cash will be delivered to a trustee for my wife’s benefit,” Buffett wrote in the letter. “My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund.”


Buffett’s latest moves

Buffett’s latest letter to shareholders, along with Berkshire Hathaway’s earnings report, is set to come out next Friday (Feb. 23).


In the meantime, recent US Securities and Exchange Commission filings have provided insight into Buffett’s recent stock moves—for example, Berkshire Hathaway sold off about 1% of its stake in Apple in the last quarter of 2023.

The company now has a 5.9% stake in the tech giant, worth about $176 billion, according to the Wall Street Journal. That is still over half of the company’s more than $300 billion stock portfolio.


During the same period, Berkshire Hathaway has increased its stake in Chevron by 18% to more than $18 billion, according to Forbes, and also grew its stake in Occidental Petroleum by almost 9% to about $14.5 million.

Its stake in the satellite radio company SiriusXM increased to about $220 million, MarketWatch reported.

The S&P 500 is on such a tear that even Warren Buffett can't keep up (2024)


Will Berkshire outperform the S&P 500? ›

As Buffett notes, Berkshire isn't in a position to produce returns that will beat the overall S&P 500 by 9.5 percentage points per year as it has in the past. But it offers a very attractive outlook for risk-adjusted returns.

What is Warren Buffett's average annual return? ›

Since they began operating Berkshire in 1965, the stock has risen at an annualized pace of 19.8%. The S&P 500 has had an annualized return of 10.2% during the same timeframe. Even over a shorter period, Berkshire has significantly outperformed the S&P 500.

What is the 10 year return on Berkshire Hathaway? ›

Ten Year Stock Price Total Return for Berkshire Hathaway is calculated as follows: Last Close Price [ 402.10 ] / Adj Prior Close Price [ 128.49 ] (-) 1 (=) Total Return [ 212.9% ] Prior price dividend adjustment factor is 1.00.

What does Warren Buffett not invest in? ›

Buffett is also uninterested in gold. In his 2011 letter to shareholders, he noted that gold has two significant shortcomings, “being neither of much use nor procreative.” “If you own one ounce of gold for an eternity, you will still own one ounce at its end.

Which S&P 500 does Warren Buffett recommend? ›

The two investments held in Berkshire Hathaway's portfolio that Buffett recommends more than anything else are two S&P 500 index funds. The SPDR S&P 500 ETF Trust (NYSEMKT: SPY) and the Vanguard S&P 500 ETF (NYSEMKT: VOO).

Who will take over Berkshire Hathaway after Warren Buffett? ›

OMAHA, Nebraska, May 6 (Reuters) - When Greg Abel succeeds Warren Buffett at the helm of Berkshire Hathaway (BRKa.N) , opens new tab, he is expected to preserve the culture at the behemoth even if he does not match the star power of his legendary boss.

How to get 30% annual returns? ›

Aiming for a 30% return necessitates venturing far from established benchmarks, venturing into riskier and less predictable territory. This often involves concentrated bets on individual stocks or volatile sectors, exposing you to the potential for substantial losses, negating even slight gains.

What is Warren Buffett's top investing rule? ›

Rule 1: Never lose money.

By following this rule, he has been able to minimize his losses and maximize his returns over time. He emphasizes this so much that he often says, “Rule number 2 is never forget rule number 1.”

Why not just buy Berkshire Hathaway? ›

A/BRK. B Bears Say. Given its size, Berkshire's biggest long-term hurdle will be its ability to consistently find deals that not only add value but are also large enough to be meaningful. Another big issue facing the firm is the longevity of chair and CEO Warren Buffett, who turned 93 at the end of August 2023.

How much was $10,000 invested in the S&P 500 in 2012? ›

A popular S&P 500 index ETF started 2012 with a dividend-adjusted price of around $104 per share and recently closed at $376. That works out to a gain of roughly 262%. That means your $10,000 invested in this broader benchmark index would now be $36,200.

What is the average return on the S&P 500 last 20 years? ›

Stock Market Average Yearly Return for the Last 20 Years

The historical average yearly return of the S&P 500 is 9.74% over the last 20 years, as of the end of February 2024. This assumes dividends are reinvested. Adjusted for inflation, the 20-year average stock market return (including dividends) is 6.96%.

What is the long term outlook for Berkshire Hathaway stock? ›

Fair Value Estimate for Berkshire Hathaway

With its 4-star rating, we believe Berkshire Hathaway's stock is undervalued compared with our long-term fair value estimate of $427 per Class B share, which is equivalent to 1.45 times our estimate of the firm's book value per share at the end of 2024 and 1.35 times for 2025.

What is Warren Buffett's golden rule? ›

"Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1."- Warren Buffet.

What is the Buffett Rule 1? ›

"The first rule of an investment is don't lose [money]. And the second rule of an investment is don't forget the first rule. And that's all the rules there are." This quote from legendary billionaire investor Warren Buffett has become one of his most well-known aphorisms.

Does Warren Buffett own any silver? ›

He has invested almost $1 billion in silver, so the reason for his aversion is not simply a dislike for precious metals. The explanation for Buffett's dislike of gold and for his enthusiasm about silver stems from his basic value investing principles.

What will brk b be worth in 10 years? ›

According to the latest long-term forecast, Berkshire Hathaway price will hit $450 by the middle of 2025 and then $500 by the end of 2026. Berkshire Hathaway will rise to $600 within the year of 2028, $700 in 2029, $800 in 2031 and $900 in 2034.

What will Berkshire Hathaway be worth in 2025? ›

461.44 (15.11%)

Estimated share price by May 2, 2025.

Will Berkshire continue to beat the market? ›

So yes, Berkshire's returns have slowed down. And yes, its investing universe is more limited than in the past. But the keys to the company's success -- a collection of legendary investors making long-term investments -- remains in place. Expect Berkshire to continue beating the market in the decades to come.

Has Berkshire Hathaway outperformed the market? ›

Berkshire Hathaway shares have already outperformed this year, with each share class having advanced more than 10%. The S&P 500 is up by more than 7% this year. Class A shares marked an all-time closing high this year, reaching $634,440 in March; they closed at $603,000 on Friday.

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