2023-12-24 18:51:00
Berkshire Hathaway’s performance has raised eyebrows as it trails behind the S&P 500 for the past decade, despite being one of the most well-known and respected companies. In 2023, the company’s Class A shares saw a 16% increase, falling short of the S&P’s total return of 26%.
Even over the past 10 years, Berkshire has seen an average annual gain of 12%, slightly lower than the S&P’s 12.2% return, including dividends. The company’s stock has also underperformed the index in the last five years and 20 years despite significant growth in operating profits and a lucrative investment in Apple.
Berkshire’s stock portfolio, largely driven by Apple, has shown potential for growth, with the company’s operating profit looking to reach nearly $40 billion in 2023. However, concerns have been raised about the company’s lagging stock performance, especially given its trillion-dollar asset base.
There are also concerns about the age of Warren Buffett, the legendary investor and CEO of Berkshire Hathaway, who turned 93 last August. Despite this, Buffett continues to be actively involved and is still on the lookout for significant investment opportunities, with Berkshire recently increasing its stake in Occidental Petroleum.
The company’s performance in the third quarter also saw a loss on the bottom line due to losses in its tradable stocks, including Apple. However, Buffett has expressed confidence in the company’s potential for the post-Buffett period, with vice chairman Greg Ebel seen as his likely successor and plans in place for his children to manage his charitable trust.
While Berkshire’s stock performance continues to face challenges, the company remains a prominent player in the market, and Buffett’s impact on the company’s future cannot be underestimated.
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