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S&P trounces Berkshire by biggest margin since 2009

Fri, Jan 03, 2020

Berkshire Hathaway Class A shares gained 11.0% in 2019 in their fourth straight annual advance.


The benchmark S&P 500 index, however, soared 31.5% (with dividends included) in its best year since 2013.


The 20.5 percentage point gap is the biggest win for the S&P since 2009 when it beat Berkshire by 23.8 percentage points.


Berkshire outperformed the S&P in the previous three years and in 12 of the last 19 years.


In Buffett's letter to shareholders released last February, he ended his decades-long practice of comparing Berkshire's per-share book value to the S&P. (See the letter for an explanation of his reasoning.)


Instead, Buffett will compare Berkshire's stock price to the S&P. While conceding the markets "can be extremely capricious," Buffett believes that over time, Berkshire's stock price "will provide the best measure of business performance."

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