Berkshire Hathaway outperformed the S&P 500 in the last 20 years (if not more). Its CAGR in is 20%, while the S&P's is 10%.
If outperformed the it in the last 10 years (306% vs. 206%).
It outperformed it in the last 5 years (84% vs. 77%).
It outperformed it in the last 2 years (67% vs. 52%).
If outperformed it in the last 1 year (25% vs. 9%).
While similar argument can be made for many others stocks, there is that (huge) extra risk of not being diversified. We all know that some stocks outperform the market, that's why buying the S&P 500 Index is everyone's well advised recommendation. That's all well known, but what my question is:
Isn't buying BRK-B the same as buying VOO when it comes to diversification because its encompasses 44 different companies and most of them are in different sectors and are run by the best investor of all times Buffett himself with a chosen successor in place tutored by Buffett and his team?
It also has its subsidiaries and quite a few of them.
It also doesn't give away any dividends so I guess there is that advantage of you not being taxes on them while knowing the profits are reinvested in the company.
By buying Apple or Microsoft, yes, you buy amazing companies, but you're doing just that – buying a stock of a company, but by buying Berkshire Hathaway your amount of diversification is quite large and its not concentrated in a single sector (like QQQ or IHI might be for example).
Considering the facts (which are well known, it is Buffett after all), would it be safe to just allocate 100% of your portfolio into BRK-B and enjoy gains?
(even Bill & Melinda Gates Foundation Trust agrees to an extent with Berkshire Hathaway being 43% of its portfolio).
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