41–45 of 45 posts
Berkshire's huge pile of cash is more than likely the reason for the latter-day under-performance. In its early years, its cash pile was obviously much more modest, and it was easier to find opportunities which would fit Buffett's investment criteria while also moving the needle from an ROI standpoint. But now that cash pile has grown substantially. It's orders of magnitude harder to find investments which move a $10…
Does that table in the article not compare Buffet's share values vs S&P shares value plus their dividends?
funny thing is, it was probably about 10 years ago or more that he made a bet that no active manager could beat the market.
Earlier quoted context omitted.
When making a comparison like that, the endpoints really matter. How many of the last 20 years has he been beating the market? And the next 10? Today is at an extreme in valuations and of course everyone who is betting on a fall will look bad until suddenly they don't. It's currently not possible to say whether sitting on cash is stupid or wise, the next few years will bear that out one way or another.
The next 10? I don't know, I can't predict the future. And finding out 10 years from now he didn't beat the market for 30 years, is half a lifetime of investing (most of your adult life). Not like you can go back and fix that. It's 20 years of failing to beat a simple "invest in indexes and forget it". So basically an adult who followed index investing for the last 20 years can say "I have higher returns than Buffet"…
funny thing is, it was probably about 10 years ago or more that he made a bet that no active manager could beat the market.
And he won that bet.