Practical analysis for investment professionals
25 April 2014

Weekend Reads for Investors: Berkshire Bears in Hibernation

Posted In: Weekend Reads

In the next week, faithful investors from around the world will make their annual pilgrimage to hear from some of the brightest minds in the business. I’m not speaking about the upcoming 67th CFA Institute Annual Conference, at which attendees will hear from a wide range of speakers, including hedge fund manager Cliff Asness, valuation guru Aswath Damodaran, and celebrated statistician Nate Silver. While this gathering in Seattle promises to be chock-full of great ideas (and you can follow the action on the conference blog), it will be competing for attention with Berkshire Hathaway’s annual meeting, affectionately known as “Buffett-palooza.”

Tens of thousands converge on Omaha, Nebraska, at this time each year to hear from Warren Buffett and his longtime partner Charlie Munger. Earlier this week, Buffett announced that he couldn’t find someone with a bearish stance on Berkshire’s stock (BRK/A) to join him on stage, something he started last year, with Doug Kass filling the role of skeptic. A lack of bearish sentiment is typically a cautionary signal for stocks, but Berkshire may prove to be an exception.

In his 49 years at the helm, Buffett, measuring performance as the annual change in book value per share, has underperformed the S&P 500 Index in just 10 years. In his losing years, the average return for the broad market was 25.1%. Buffett is indeed a foul-weather investor, as evidenced by his performance in down markets. During his tenure, the S&P 500 Index has posted a negative return in 11 years, and Buffett has beaten the benchmark by an average of 25.0% in those years. While we don’t advocate following the herd, for those with a cautious stance on stocks, history suggests that a bearish bet on Berkshire may be ill-advised.

Below are some other stories and videos that caught my eye in recent weeks.

Picking Stocks

Emerging Markets

Valuation Matters

Investment Bubbles

New Issues

Pension Problems

Activists Angle


The Lighter Side

Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

Photo credit: ©

About the Author(s)
David Larrabee, CFA

David Larrabee, CFA, was director of member and corporate products at CFA Institute and served as the subject matter expert in portfolio management and equity investments. Previously, he spent two decades in the asset management industry as a portfolio manager and analyst. He holds a BA in economics from Colgate University and an MBA in finance from Fordham University. Topical Expertise: Equity Investments · Portfolio Management

Leave a Reply

Your email address will not be published. Required fields are marked *

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.