Berkshire Hathaway Outperforms the S&P 500 in 2016

Get The Full Warren Buffett Series in PDF

Get the entire 10-part series on Warren Buffett in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

In 2016, Berkshire Hathaway class A shares rose 23.4% vs. a 9.8% increase in the S&P 500 (with dividends included.)  Over the 51 year period from 1965 – 2015, Berkshire’s compounded annual gain equaled 20.8% vs 9.7% for the S&P 500 (with dividends included.)  From 2012-2016, the most recent five year period, Berkshire’s compounded annual gain equaled 16.3% vs. 12.2% for the S&P 500.

Berkshire’s closing share price of $244,121 on December 30, 2016, represents a price to book value ratio of 1.5, based on a book value of $163,783 on September 30, 2016.  Its price to book value ratio has averaged 1.6 over the past 30 years.  Warren Buffett has previously stated that he would buy back shares when Berkshire’s price to book value is below 1.20.

Photo by GDS Infographics



About the Author

Dr. David Kass
David I Kass Clinical Associate Professor, Department of Finance Ph.D., Harvard University Robert H. Smith School of Business 4412 Van Munching Hall University of Maryland College Park, MD 20742-1815 Phone: 301-405-9683 Email: dkass@rhsmith.umd.edu (link sends e-mail) Dr. David Kass has published articles in corporate finance, industrial organization, and health economics. He currently teaches Advanced Financial Management and Business Finance, and is the Faculty Champion for the Accelerated Finance Fellows. Prior to joining the faculty of the Smith School in 2004, he held senior positions with the Federal Government (Federal Trade Commission, General Accounting Office, Department of Defense, and the Bureau of Economic Analysis). Dr. Kass has recently appeared on Bloomberg TV, CNBC, PBS Nightly Business Report, Maryland Public Television, Business News Network TV (Canada), Fox TV, American Public Media's Marketplace Radio, and WYPR Radio (Baltimore), and has been quoted on numerous occasions by Bloomberg News and The Wall Street Journal, where he has primarily discussed Warren Buffett and Berkshire Hathaway. He has also launched a Smith School “Warren Buffett” blog. Dr. Kass has accompanied MBA students on trips to Omaha for private meetings with Warren Buffett, and Finance Fellows to Berkshire Hathaway’s annual meetings. He is an officer of the Harvard Business School Club of Washington, DC, and is a member of the investment and budget committees of a local nonprofit organization. Dr. Kass received a Smith School “Top 15% Teaching Award” for the 2009-2010 academic year.