Berkshires Performance vs. the S&P 500
Berkshire Hathaway, a company owned by Waren Bufett, has been outstanding in performance since 1965. However, in 2016, a recent dip in overall market performance led fears into investors that Berkshire Hathaway may be headed into a bear market, such as other few S&P 500 companies like Apple and Walmart (Wieczner). On the other hand, most of the companies that were falling into the bear market are small-cap stock companies with a market value of less than $5 billion (Wieczner). Despite the ups and downs in the stock markets, Berkshire Hathaway has been able to maintain an ever growing trend since 1965.
Reasoning Behind Berkshires Consistent Strong Performance
In his letter to the shareholders earlier in the year 2017, Waren Bufett explained why his company has been able to sustain consistent growth, even at times of economic dips. He also explains where he is leading the company into the future. In his letter, Warren Bufett explains that ever since he changed the management of the company back in 1965, the company has experienced tremendous gains in market capitalization. This, he explains that it is through the careful investments into other businesses
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Berkshire Hathaways Per-Share Book Value and Per-Share Market Value has been outstanding since 1965 as seen in the table from Bufetts letter to the shareholders. The market-price gain has, by far, exceeded that of the book-value gain over the 52 year period set out in the table. This means that the stock prices for Backshire Hathaway have a high value. Investors perception of the companys future is high, consequently leading to the high valuation of the companys stock price. In the letter, Waren Bufett further re-assures the investors in his companys intentions of the future and how the company shall be making its