Get Instant Loan up to ₹10 Lakh! Warren Buffett's Berkshire Hathaway faced losses worth approximately $15 billion on its major holdings amid a global stock market sell-off.
Over the last two years, the broader market, buoyed by high-flying tech stocks, is up about 53%. Berkshire Hathaway has trailed the market, but still performed very well. I believe this trend will reverse in 2025, and Berkshire Hathaway will outperform the S&P 500.
It's important to note, though, Berkshire Hathaway edged out the S&P 500 in the past 10- and five-year periods. With that said, though, Buffett did own technology and growth stocks, too. And ETFs that focused on large growth stocks did even better in nearly all periods.
Many novice investors lose money chasing big returns. And that's why Buffett's first rule of investing is “don't lose money”. The thing is, if an investors makes a poor investment decision and the value of that asset — stock — goes down 50%, the investment has to go 100% up to get back to where it started.
Always sell a stock it if falls 7%-8% below what you paid for it. This basic principle helps you always cap your potential downside. If you're following rules for how to buy stocks and a stock you own drops 7% to 8% from what you paid for it, something is wrong.
The 90/10 rule in investing is a comment made by Warren Buffett regarding asset allocation. The rule stipulates investing 90% of one's investment capital toward low-cost stock-based index funds and the remainder 10% to short-term government bonds.
Ten Year Stock Price Total Return for Berkshire Hathaway is calculated as follows: Last Close Price [ 442.66 ] / Adj Prior Close Price [ 148.63 ] (-) 1 (=) Total Return [ 197.8% ] Prior price dividend adjustment factor is 1.00.
Invesco QQQ Trust (QQQ)
The Invesco QQQ Trust is a go-to ETF that tracks the Nasdaq-100 Index. It's outperformed the S&P 500 in seven out of the last 10 years, all for a reasonable 0.2% expense ratio. It slightly trails the S&P's one-year return, but only slightly, and it thrashed the S&P in full-year 2023.
Top Warren Buffett Stocks
Coca-Cola (KO), 400 million. Kraft Heinz (KHC), 325.6 million. Apple (AAPL), 300 million. Occidental Petroleum (OXY), 264.3 million.
Berkshire Hathaway doesn't pay dividends
In the comparison to the S&P 500 Index above, the performance figures include reinvested dividends. That is a benefit for the S&P 500, but has no impact on Berkshire Hathaway's performance because the company doesn't pay a dividend.
The main competitors of Berkshire Hathaway include Progressive (PGR), Travelers Companies (TRV), Allstate (ALL), Arch Capital Group (ACGL), W. R. Berkley (WRB), Markel Group (MKL), Cincinnati Financial (CINF), Erie Indemnity (ERIE), Fidelity National Financial (FNF), and CNA Financial (CNA).
Rule 1: Never lose money.
By following this rule, he has been able to minimize his losses and maximize his returns over time. He emphasizes this so much that he often says, “Rule number 2 is never forget rule number 1.”
Key Takeaways. While holding or moving to cash might feel good mentally and help avoid short-term stock market volatility, it is unlikely to be wise over the long term. Once you cash out a stock that's dropped in price, you move from a paper loss to an actual loss.
His conglomerate, Berkshire Hathaway, currently holds $325 billion in cash and equivalents, according to the firm's quarterly financial statements. Over $288 billion of that pile is in U.S. Treasury Bills, the textbook example of investing at the so-called “risk-free” rate.
The S&P 500 Index is considered a gauge of the U.S. economy. It is a broad-based measure of large corporations traded on U.S. stock markets. Passively holding the index over longer periods of time often produces better results than actively trading or picking single stocks.
Ramsey recommends investing in four types of mutual funds: growth and income funds, growth funds, aggressive growth funds, and international funds. What is Dave Ramsey's recommended asset allocation? Ramsey recommends a 100% stock portfolio, with no allocation to bonds or other fixed-income investments.
Warren Buffett has long recommended a low-fee S&P 500 tracker fund to amateur investors. Chamath Palihapitiya says it's become riskier as a few stocks now have an outsize pull on the index. Buffett mostly steers clear of tech names, but Apple has been his No. 1 stock for years.
As of December 2024, in the previous 30 Years, the Warren Buffett Portfolio obtained a 10.37% compound annual return, with a 13.67% standard deviation.
Buffett loves playing bridge, sometimes playing for over 8 hours a week, the Washington Post reported. He also likes to hit the green for some golf, spends a great deal of his time reading, and loves to play the ukulele — he said in 2020 that he has a collection of 22 ukuleles.
The closing price for Berkshire Hathaway (BRK. A) in 1990 was $6,675, on December 31, 1990. It was down 22.6% for the year. The latest price is $663,000.
Although old-guard favorites such as American Express (AXP) and Coca-Cola (KO) still form the core of the portfolio, Buffett & Co. have taken a shine to names such as Apple (AAPL) and Amazon.com (AMZN), and even to lesser-known firms such as Nu Holdings (NU).
According to Buffett, you should invest 90% of your retirement funds in stock-based index funds. According to Buffett, the remaining 10% should be invested in short-term government bonds.
Warren Buffett has said that 90 percent of the money he leaves to his wife should be invested in stocks, with just 10 percent in cash. Does that work for non-billionaires? As far as asset allocation advice goes, 90 percent in stocks sounds pretty aggressive.