u/Manjottoor ·
Reddit — r/ValueInvesting
· April 04, 2026 at 16:44
· ⬆ 19 pts
· 💬 21 comments
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Summary
The post compares Berkshire Hathaway's (BRK.B) long-term historical returns to the S&P 500, noting recent underperformance.
The author's thesis is that Berkshire's "good days are in the past," leading them to hold but not add to their position, while questioning the strategic rationale for the company's massive cash pile.
Quality assessment: Noise / Opinion. The post presents basic, well-known return data but centers on personal sentiment and speculative musings about succession and cash usage without deep fundamental analysis.
Score19
Comments21
Upvote %79%
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Following are the returns for Berkshire vs S&P 500 (dividends reinvested) for the time periods listed;
1 year : -10.4% Vs +14.2% (S&P by +24.6%)
5 years : +11.7% Vs +13.5% (S&P by +1.8%)
10 years : +11.8% Vs +12.9% (S&P by +1.1%)
25 years : +9.8% Vs +8.2% (Brk.B by +1.6%)
30 years : +10.6% Vs +10.1% (Brk.B by +0.5%)
Warren has said in the past that he has asked his close ones to invest in S&P 500 after he is gone. Seems like great advice knowing Berkshire’s good days are in the past. I am long term holder with no intention of selling what I have but also no intention of investing more at this point.
The idea of holding nearly half of its market cap in cash baffles me. Maybe preparing for Abel to buyback his stake from charities after he is gone.
He has a clause in his charity that he wants it fully gone in 10 years after his death or execution of will.
However, every one of my assumptions with Berkshire has always been wrong. So, I don’t really know why they are collecting cash. Maybe because of his age he has seen so many ups and downs that he is clinching his pearls.
Hoping Abel turns out to be like Tim Cook has been after Steve Jobs.
The author is a long-term holder but believes Berkshire's best performance is behind it and sees no reason to invest more capital, citing recent underperformance vs. the S&P 500 and strategic confusion over the large cash position. Data shows BRK.B underperforming SPY over 1, 5, and 10-year periods. This relative underperformance, combined with the author's belief that Buffett's era of alpha generation is over, suggests future returns may not justify new investment. Hold existing position but do not allocate new capital (Avoid). The author admits their assumptions about Berkshire are often wrong. A new CEO (Greg Abel) could deploy cash effectively or market conditions could favor Berkshire's value style.
The author implicitly endorses the S&P 500 as a superior investment for the future, citing Warren Buffett's own advice and Berkshire's recent trailing performance. The post highlights S&P 500 outperformance over BRK.B for the last 1, 5, and 10 years. Given Buffett's recommendation and the presented data, the S&P 500 is presented as the more reliable, less complex path for future returns. The logical extension of the author's argument is a preference for the S&P 500 index over active management via Berkshire. Mean reversion; Berkshire's long-term record still shows outperformance over 25-30 years and may do so again if market conditions shift.
This Reddit post, published April 04, 2026,
features u/Manjottoor
discussing BRK.B, SPY.
2 trade ideas extracted by AI with direction and confidence scoring.