Berkshire Hathaway (BRK-B) saw downward price action of 1.6% in the first quarter. The stock’s returns trailed broader markets. The S&P 500 (SPY) rose 13.1%, while the NASDAQ Composite (QQQ) rose almost 16%. The Dow Jones Industrial Average (DIA) also saw double-digit gains in the first quarter.
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Warren Buffett, Berkshire Hathaway’s chairman, has earned his reputation by beating the market by a wide margin over the last five decades. There have been instances when Berkshire Hathaway has underperformed the broader markets. However, barring a few years of underperformance, Buffett has managed to beat the S&P 500 on most occasions.
Looking at Berkshire Hathaway’s performance compared to the S&P 500, it outperformed the index by 10.8% between 1965 and 2018. The calculations are based on data from Berkshire Hathaway’s annual report and the S&P 500’s returns including the dividends. Berkshire Hathaway’s performance looks astonishing during this period.
Berkshire Hathaway’s holdings
However, Berkshire Hathaway’s outperformance compared to the S&P 500 has narrowed over the last two decades. Read Can Warren Buffett Outperform the Markets in 2019 for more analysis. At the end of the fourth quarter, Berkshire Hathaway held stakes in several publicly-traded securities including Apple (AAPL), Kraft Heinz (KHC), and Coca-Cola (KO). Berkshire Hathaway exited Oracle (ORCL) and took a new position in Red Hat (IBM) (RHT) in the fourth quarter. Berkshire Hathaway also holds stakes in airline stocks like Southwest Airlines (LUV), Delta Air Lines (DAL), and United Continental (UAL).