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In a first, Buffett gets beat by the S&P 500 over five years. (But wins over six.)
Fortune ^

Posted on 03/01/2014 5:49:21 AM PST by Red in Blue PA

FORTUNE -- In a practice he began when running a hedge fund 50 years ago, Warren Buffett has always positioned his company, Berkshire Hathaway (BRKA), as being in annual competition with the S&P 500 index's total return—and right now that's not working too well for him.

Announcing Berkshire's 2013 results this morning, Buffett said in his annual letter to shareholders that book value per-share—Buffett's standard yardstick in this competition—rose by 18.2% to $134,973. That's a very solid performance. But the S&P 500 index, having its best year since 1997, had a huge total return of 32.4%.

(Excerpt) Read more at finance.fortune.cnn.com ...


TOPICS: News/Current Events
KEYWORDS: investing; warrenbuffet; warrenbuffett
I am of the opinion that Buffett will lag the market more going forward, for several reasons.

He recently claimed that he would never sell even a single share of his KO, regardless of the fact that Coca-Cola sales are not going to be growing as they have in the past because of a trend toward healthier lifestyles. What makes this worse IMO is the fact that KO runs commercials basically saying its own products cause obesity. That is a deal breaker for me. The CEO should be removed for that. It is the misuse of the product which causes obesity, but the question remains, why get into bed with government at all?

Secondly, Buffett refuses to embrace technology and as tech makes up a growing percentage of the S&P, this will have to hurt him going forward.

1 posted on 03/01/2014 5:49:21 AM PST by Red in Blue PA
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To: Red in Blue PA

Value investing is not designed to soar when the market goes crazy. Buffett’s type of stocks will naturally lag stocks like the high-fliers.

The real key to making money in the stock market over many years is not to get huge gains, but to avoid huge losses. If you make some money every year, compounding will do the rest.


2 posted on 03/01/2014 6:04:06 AM PST by proxy_user
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To: proxy_user

Amen....... it is why Warren Buffet is near the top of the rich man list


3 posted on 03/01/2014 6:07:35 AM PST by bert ((K.E. N.P. N.C. +12 ..... History is a process, not an event)
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To: proxy_user

I am cognizant of that fact. But I also can see the writing on the wall.

Starbucks will vastly outperform Coca-Cola over the coming 20 years. Yet Buffett owns KO and no Starbucks, and is sticking to owning every share even though KO is basically running ads against its own products.

He owns no technology, which all investors should own as part of their portfolio.

Procter & Gamble is expensive compared to others in the market and will likely lag the averages because of its valuation.

I could go on and on......


4 posted on 03/01/2014 6:10:44 AM PST by Red in Blue PA (When Injustice becomes Law, Resistance Becomes Duty.-Thomas Jefferson)
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To: Red in Blue PA
Buffett said in his annual letter to shareholders that book value per-share—Buffett's standard yardstick in this competition—rose by 18.2% to $134,973.

Wait, wait, wait. I think we're missing the lead here. A SINGLE share of BKA goes for 135,000 dollars???

5 posted on 03/01/2014 6:25:17 AM PST by Texas Eagle (If it wasn't for double-standards, Liberals would have no standards at all -- Texas Eagle)
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To: Texas Eagle

No, it is $173,000 because he never split the stock.


6 posted on 03/01/2014 6:35:39 AM PST by Red in Blue PA (When Injustice becomes Law, Resistance Becomes Duty.-Thomas Jefferson)
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To: Texas Eagle

http://finance.yahoo.com/q?s=BRK-A


7 posted on 03/01/2014 6:36:18 AM PST by Red in Blue PA (When Injustice becomes Law, Resistance Becomes Duty.-Thomas Jefferson)
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