Most investors think Warren Buffett's Berkshire Hathaway will outperform the S&P 500 in the next 5 years, survey says. Most investors expect Berkshire Hathaway stock to outperform the S&P 500 over the next five years. Shares of Warren Buffett's Berkshire gained 3.3% in 2022, compared to the S&P 500's loss of 18%.
Its Relative Strength Rating of 78 means it has outperformed 78% of stocks in terms of price performance over the past 12 months. Berkshire Hathaway stock held strong in 2022, making a slight gain compared to a loss of more than 19% for the S&P 500. So far in 2023, BRKB is up nearly 12%. The S&P 500 is up nearly 19%.
Berkshire Hathaway Inc. (BRK-B) has a higher volatility of 2.84% compared to SPDR S&P 500 ETF (SPY) at 2.67%. This indicates that BRK-B's price experiences larger fluctuations and is considered to be riskier than SPY based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
Berkshire Hathaway saw a 19.8% compounded annual gain from 1965 to 2022, compared to 9.9% for the S&P 500 Index.
A/BRK. B, owing to its diversification and lower overall risk profile, offers one of the better risk-adjusted return profiles in the financial-services sector and remains a generally solid candidate for downside protection during market selloffs.
While there might be changes to the company culture and some turbulence in market reactions, the fundamental ethos of Berkshire Hathaway, its strong portfolio of businesses, and the resilience of its shareholder base are expected to remain steadfast.
It owns a variety of well-known private businesses, such as GEICO, and also has minority interests in public companies, such as Apple. Risks of being a Berkshire investor include issues of regulatory challenges and being a conglomerate, as well as the performance of successors when Warren Buffett retires or dies.
Most investors think Warren Buffett's Berkshire Hathaway will outperform the S&P 500 in the next 5 years, survey says. Most investors expect Berkshire Hathaway stock to outperform the S&P 500 over the next five years. Shares of Warren Buffett's Berkshire gained 3.3% in 2022, compared to the S&P 500's loss of 18%.
Berkshire has a history of outperforming the S&P 500 during recessions, and performing especially well during bear markets, according to data from Bespoke Investment Group. Since 1980, Berkshire shares have beat the broader market over the course of six recessions by a median of 4.41 percentage points.
Ultimately, Berkshire, despite its reputation, is a stock that's only matched the S&P 500 for the last 20 years, and it will eventually lose Buffett's stewardship. There are better places to look in the market for the stocks that promise more growth, have disruptive potential, and have more focused missions.
Nasdaq 100 has significantly outperformed S&P 500 in terms of performance. Over the past 15 years, Nasdaq 100 has delivered a CAGR of around 16%, while S&P 500 has returned about 8%.
Berkshire Hathaway is the world's most expensive stock. One of the main reasons why the company's stock is so expensive is because it never went through a stock split. The company's CEO, Warren Buffet, deliberately decided against a split to prevent short-term trading which would lead to higher volatility.
Going from Buffett's past history, it's unlikely that the company will pay investors a dividend while he remains in charge. There's every chance that Berkshire Hathaway's future CEO also decides against paying dividends, especially given Buffett's track record of creating shareholder value by other means.
Berkshire Hathaway holds a diversified basket of companies in dependable industries. The company's massive cash pile is an additional safety net. The stock's attractive valuation makes it a no-brainer for investors seeking safety.
Stock Price Forecast
The 2 analysts offering 12-month price forecasts for Berkshire Hathaway Inc have a median target of 384.26, with a high estimate of 405.00 and a low estimate of 363.52. The median estimate represents a +9.84% increase from the last price of 349.82.
As we suspected, our examination of Berkshire Hathaway's analyst forecasts revealed that its outlook for shrinking earnings is contributing to its low P/E. Right now shareholders are accepting the low P/E as they concede future earnings probably won't provide any pleasant surprises.
It has a market capitalization of over $715 billion and is the sixth-largest public company in the world. Berkshire Hathaway's success is largely due to Buffett's value investing strategy, and its annual shareholder meetings have become a mecca for value investing proponents.
From 1965 the annualized returns are 20%, double that of the broad market. However, over the last 20 years BRKB has almost perfectly matched the returns of the market, putting up annualized returns of 9.95% vs the market's 9.89%. The resiliency during the tough times is why investors pick Berkshire though.
Buffett has often said that an S&P 500 index fund is the best way for most investors to gain exposure to the stock market. Buffett himself owns two S&P 500 index funds through Berkshire Hathaway: the Vanguard S&P 500 ETF (VOO 0.97%) and SPDR S&P 500 ETF Trust.
The phrase "beating the market" means earning an investment return that exceeds the performance of the Standard & Poor's 500 index. Commonly called the S&P 500, it's one of the most popular benchmarks of the overall U.S. stock market performance. Everybody tries to beat it, but few succeed.
They're a good proxy for stocks overall: An S&P 500 Index fund tends to correlate "more closely to the broader market, so it's better than some other indexes, like the Dow Jones Industrial Average), which only tracks 30 stocks," says Ritter. However, there's no guarantee that it will be successful.
Nothing about Buffett's health will impact the businesses of the roughly 50 companies in which Berkshire currently invests. Sure, Berkshire's share price might go down temporarily when Buffett dies. It also might not. Buffett may live another two years or he may live another 15.
NYSE: BRK.
Berkshire Hathaway differs from other investment firms, like hedge funds. Anyone can invest in Berkshire Hathaway if they have enough money to buy at least one Class B share (less than $350 in mid-2023).
Berkshire Hathaway has received a consensus rating of Buy. The company's average rating score is 3.00, and is based on 1 buy rating, no hold ratings, and no sell ratings.