"underperforms" here means that they only made 11% profit, or something along the lines of 30 billion USD per 3 months.

So this isn't any real-world trouble, nor did anyone actually lose money. It's simply investors feeling frowny because they were hoping for an even higher payout. Poor them :p

I don't think it's investors feeling grouchy as much as Wall St. reporters who seem unable to write in anything other than garbage language. BH management do not concern themselves with short- or medium-term performance much; eyes fixed firmly on the long term. This is utterly foreign to most finance journos.

If you read Buffet's letter to investors, you'll see him explicitly saying that some years are bound to be less than wonderful, but that over the long run, envestment in BH will do well.

So it underperforms compared to ... having your own money printing operation?

The performance of a stock is usually compared to one index, (S&P 500 in that case)

The reasoning is that doing 4% when the market is in average doing 10% it is more or less the same as losing 6%

If other people making more than you means you're losing, then you're losing from the day you were born to the day you die.

No...this is how you measure performance. If you are paying an active manager like Buffet to manage money for you, you want them to do better than a dumb strategy like "just buy the whole index". That is why relative performance matters here.

This isn't supposed to inspire pity or something. It's supposed to give you information about the possible deterioration of his edge. Which isn't to say that it gives you much information about that, just, that's its point.

What you said here is the equivalent of going to a basketball game and saying that it doesn't make sense to talk about which team was better because they both scored points.

Not "other people" but "the default".

It's like trickling down a slope with a brake partly on. You get motion for free, but you're wasting so much of it.

Not really. It would only be losing money if it was less than inflation.

opportunity lost.

Microsoft, Apple, Amazon, Google, Facebook make up something like 20% of the S&P 500, and most of its gains. Apple and Microsoft are 10% alone.

So you could make the same argument for someone who chose to invest in the whole index, vs just the top 5. Its not necessarily a good argument. It will be interesting if they are still the top 5 tech companies in 10 years. It feels like they have a bit more of a foothold than the Dell, IBM, HP of years past. Maybe cloud vendor lock in isnt worse than the platform lock ins they sold.

It often underperforms during periods of exuberance. Everyone bleats until there’s a crash, leaving Berkshire as one of the few still above water.

Isn't investing with Warren a long term play? One year lower is a big deal?

Not down, just lower profit than stock index.

Miss-typed! Thanks for pointing it out.

It’s Berkshire Hathaway’s worst year relative to the SP 500 in the last 10, not that it’s underperformed for 10 years.

(Using the metric of stock price, which is basically popularity and over the short term doesn’t necessarily correspond to any actual rationality. Ymmv, the market can stay irrational longer than you can stay solvent, etc)

We will see BRK performance compared to the S&P with the potential upcoming meltdown of the market due to Coronavirus global slowdown. Futures for Monday looking god-awful. The next 9 months in the market are going to be very interesting (fed decisions, election, lasting effects of virus).

Buffett is notoriously conservative. The current bull market has gone very long. When the pendulum switches back the other way, people will be writing about the genius of Warren Buffett once again.

Buffett's first rule of money: "Don't lose money."

And so does the Bridgewater to the best of my knowledge. This could mean those guys are hedging too much against the next bubble burst and expect it to come rather sooner then later.

I can't read the article but, maybe this could be largely explained as BK almost doesn't invest in tech

Unsurprising. Berkshire is holding a lot of cash, waiting to invest it at a better time.

Paywalled for me.

What are the actual numbers? TFA is paywalled ofc.

It's the first page in the Buffet letter: https://www.berkshirehathaway.com/letters/2019ltr.pdf