Oracle Update, from Rocky Humbert

September 15, 2010 |

 Warren Buffett (who sometimes gets harshly criticized in DailySpec land for his politics and and pronouncements) was opining on the economy yesterday. He remains consistently upbeat on the economy, says that he sees no signs of a double-dip, and he has shortened the duration of the BRK bond portfolio substantially. Sadly, even Buffett fans must see that the effects of age are starting to show in his elocution.

I generally try to ignore his pronouncements and other self-interested comments, and focus on his portfolio and performance. His performance is once again startling: (All numbers are total return)

One year: BRK=+19.9% ; SPX=+4.93%
Three year: BRK=+1.3% ; SPX= -23.8%
Five year: BRK=+41.9%; SPX= -4.5%
Ten year: BRK=+105.9; SPX= -30.9%
20 Year: BRK = 1754% ; SPX= 393%

The one year return is the most surprising to the "what have you done for me lately?" crowd. Darn amazing!

Russ Sears comments:

Let us at least compare GrannySmith Sour apples to Red Delicous apples. The Ishare Russell 2000 index give the following as of 9/13/10:

1 yr: 10.40%
3 yr: -15.42%
5 yr: -3.01%
10 yr: 92.81%
20 yr: no data

While still over performing in all periods, the numbers suggest that the over performance has been during the financial crisis. And before that there was a 5 year period of large underperformance… almost as large as the over performance. Which given his reputation leads one to ponder, if his over/under performance of the Russell 2000 value is a good pessimist/optimist index or perhaps government fiscal policy intervention index vs. laissez-faire i.e. Govt can tax and spend our way to prosperity because they are so much wiser than the individual, especially the rich. 


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