As many of you know, I’ve finished my 5th book, due in early
December January. I think you all will really like this one. The focus is on 13F investing and tracking some of the most brilliant stock pickers in the world. Below is a last minute study I added to the book. It was generated from a Q&A at my Seattle speech I gave last weekend. The question was – what performs better, investing in Berkshire Hathaway stock, or in Buffett’s stock picks?
Below is the answer. We used the standard top 10 13F holdings, updated quarterly 50 days after the quarter.
The good news is, either strategy worked great and beat the S&P 500 by about 4-5 percentage points per year. And note, that outperformance has occurred while Buffett and Berkshire have underperformed the S&P 500 since the bottom in 2009, and 13F picks in six out of seven years. This is also an instructive lessons of investing across an entire business cycle. How many investors would abandon a mutual fund or ETF that underperformed 6/7 years?
The best news? You can allocate to Buffett and not pay any hedge or mutual fund fees!