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danceswithtree t1_irun5cx wrote

Reply to comment by Skierdude11 in [OC] Warren Buffett's Berkshire Hathaway vs Cathie Wood's ARKK ETF Since 2020 (right click chart to turn off loop) by OverlookedAlpha

What about including the S&P500 into the mix?

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notgoodthough t1_iruvk3p wrote

Berkshire Hathaway moves very similar to the S&P 500, but iirc has slightly better returns over multiple decades.

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danceswithtree t1_iruxbx4 wrote

I guess that's my point of bringing up the S&P. There are plenty of funds that beat the S&P for any given year. Almost none can do it consistently. That's what made Buffet and Berkshire notable-- the long term performance.

I would imagine that if you plot the distribution of returns for all the funds, it would approach a normal distribution. For the top performers (eg >3 sigma), what is their performance the next year? My gut feeling us that risky investments will increase the variance in returns-- those in the highest returns and highest losses will have risky strategies. So does past performance inform future performance? Maybe? All the commercials for investments want you to think so but explicitly say they don't.

So during the period in question, did Berkshire do better than the S&P?

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secoccular t1_iry83lo wrote

Better than slightly better returns. Berkshire Hathaway has an annualized return of 20.1% since 1965. The S&P500 has been 10.5% annualized.

Total BRK return since 1965: 3,641,613%

Total SPX return since 1965: 30,209%

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bestoboy t1_irv19ug wrote

then your chances of winning drastic go down

1