From Nasdaq: 2024-05-23 15:59:38

Warren Buffett’s Berkshire Hathaway (BRK.B) stock has outperformed the S&P 500 with a 19.8% CAGR since inception, accumulating a 4,384,748% gain from 1965-2023. However, in 3 of the last 6 years, Berkshire stock underperformed the market, possibly due to its large size, lack of growth investments, and declining deal opportunities.

Buffett’s recent underperformance may be attributed to Berkshire’s massive $900 billion market cap, limited exposure to tech stocks, and challenges in finding lucrative deals. The company’s record-high cash pile of $189 billion signals Buffett’s caution in the face of high market valuations, reflected in the Buffett Indicator standing at 188%.

As Buffett remains a net seller of stocks and refrains from aggressive share repurchases, the current market valuations suggest caution for value investors. Despite short-term underperformance, Buffett upholds his investing principles, waiting for favorable opportunities in a market where value investing may experience a revival.



Read more at Nasdaq: Has Warren Buffett Lost His ‘Magic Touch,’ or Has Something Changed in Markets?