$99,000.00
-1,060.00 (-1.06%)
Berkshire Hathaway, Inc. (BRK-A)
CAPS Rating:
A holding company owning subsidiaries engaged in a number of diverse business activities, including property and casualty insurance and reinsurance, utilities and energy, finance, manufacturing, retailing and services.
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Berkshire Hathaway is a collection of cash-producing companies and other holdings. On average, the holdings are above average companies. If you ask me, a collection of above-average companies will tend to beat the S&P 500 over time. Would I own any of these stocks on my own? Probably not, since I invest primarily in micro caps. However, I do believe that Buffett chooses large stocks that are better than the S&P 500 in general.
While Berkshire Hathaway is too big to outperform by a ridiculous margin like it did in the past, I fully expect it to be able to beat the market by a few points a year for the foreseeable future. Buffett is not immortal, but he buys companies when he thinks he's paying a good price. Much of your returns come from the price that you can lock in when you buy.
I expect Berkshire Hathaway to outperform the S&P 500 by a small margin on average until someone else takes over and starts consistently buying garbage with its extra cash.