2009 was not a great year to be a Berkshire Hathaway shareholder. While the S&P 500 returned 23.5%, BRK.A

stock had a gain of only 2.7%, lower than a ten year treasury note. The year was not without major criticism of CEO Warren Buffett for the price he paid for the purchase of Burlington North. While this purchase did not greatly affect 2009 returns, but many investors are concerned it will reduce returns in years to come.

2008 was not a very good year either for a Berkshire shareholder. While the stock outperformed the S&P be several points, the stock had a -31.8% return. Buffett was criticized for his purchase of preferred shares in Goldman Sachs and General Electric near the end of 2008, due to many investors belief the companies were insolvent. However this criticism quickly went away, when Bloomberg reported several months ago that Buffett has a several billion dollar paper gain on the Goldman deal, while collecting a hefty 10% a year dividend.
The S&P 500 it was the first three year winning margin over Buffett since the tech bubble years. However, the important statistic is Buffett’s 10 year record. Buffett beat the S&P 500 in 6 out of 10 years. As many other value investors note, Buffett would rather underperform in bull markets, if he can outperform in bear markets. I think he largely accomplished this even if 2008 was his worst year ever. Berkshire had a 76% total return for the past ten years in contrast to the S&P 500’s 24.1% negative return. For the record BRK has produced annual gains of 27.7% since 1977 versus 8.8% for the S&P 500.
BERKSHIRE HATHAWAY STOCK VS. S&P 500 INDEX
ANNUAL GAINS
Year BRK.A Close BRK Pct. Change S&P Close S&P Pct. Change
2009 99,200 +2.7% 1115.10 +23.5%
2008 96,600 -31.8% 903.25 -38.5%
2007 141,600 +28.7% 1468.36 +3.5%
2006 109,990 +24.1% 1418.30 +13.6%
2005 88,620 +0.8% 1248.29 +3.0%
2004 87,900 +4.3% 1211.92 +9.0%
2003 84,250 +15.8% 1111.92 +26.4%
2002 72,750 -3.8% 879.82 -23.4%
2001 75,600 +6.5% 1148.08 -13.0%
2000 71,000 +26.6% 1320.28 -10.1%

 

 

 

 

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