1/5

The $BRK meeting is starting.

Is Uncle Warren the greatest ever? I say yes.

But has Warren also been the equivalent of Michael Jordan on the Wizards, or, a shell of his former self that is getting hard to watch? Yes to this as well.

🧵to explain

2/5

Chart is the relative performance of $BRK/$SPX. Note it uses total return (divs reinvested)

$BRK has NOT been a good performer the last few decades, Warren's preferred holding period.

The ratio has been sideways since the Fin crisis, meaning 14 yrs of lackluster perf.

3/5

See peaks/troughs over the last 25 yrs UNTIL 2020.

Ratio peaks ($BRK beating $SPX) are bear mkts (Jun-98, Oct-02, Oct-08, and Nov-18).

Ratio bottoms ($BRK lags $SPX) are bull mkts, Mar-00, Apr-06)

$BRK works in bears, poor in bulls.

4/5

But since 2020 even this has not even worked.

$BRK was crushed in the 2020 sell-off and failed to recover in 2H 2020 and 2021.

So $BRK has been a "risk-off" play. When we celebrate its good performance the overall market is poor, like now.

5/5

But Mr. Mkt is irrational. How have Warren's stock picks done?

The ratio of the $BRK BV to $SPX. It has been trending down since 2009. 13 yrs of poor stock picks.

No "regular" mgr would be allowed to pick this bad. Only Warren can do this bad and still be celebrated.

Bonus

One of Warren's favorite all-time stocks in $DIS and he has called Bob Iger the best Corp Mgr he has ever worked with.

$DIS is now a total disaster, and an entire generation of outperformance has been wiped out. It is now the worst performer in the $DJIA