jakiro
Source: Daoshuo Blockchain
In the comment area of yesterday’s article, a reader left a message to mention a data that has been hotly discussed by many financial media recently:
Over the past 20 years, Buffett’s average yield has not been as good as the S&P 500.
This data was quite surprising when it was first released.But when we dig deeper, we will find that there are many details behind this unexpected data that are worth our consideration.
First of all, the yield here actually refers to the yield of Buffett’s entire team, not the yield of Buffett’s own investment.
In the early years, in order to avoid the possible surprises of well-known natural laws to the company, the two old gentlemen, Buffett and Munger, gradually handed over more and more businesses to their successor team to manage.
The successor team performed quite well in the early stages of taking over, and its performance once surpassed the two founders.But the good times did not last long, and the performance of the successor team was no longer brilliant since then. Not only did they not exceed the two old men, but they also lag behind Standard & Poor for a long time.The two old men still maintained brilliant results.
After this data was first exposed by the American financial community, many people were worried that once the two old men no longer took over this huge empire, what would Berkshire Hathaway go.
There is a scene at this shareholders’ meeting:
Ajit Jain, one of the two successors, shouted to the audience:
“No one is irreplaceable. I believe we have Tim Cook in the audience, who has proved that and set an example for many of his followers.”
To be honest, I am very cautious about this statement.
In addition to the team reasons, there are other reasons that can partially explain why Berkshire Hathaway’s yield began to decline.
Dan Bin, a well-known private equity manager in my country, explained this phenomenon well in a recent interview:
One of the reasons is that the locomotive leading the U.S. stock index has undergone tremendous changes.The companies that are leading the S&P index are now those technology giants.The technology industry is another area that Buffett doesn’t touch much.In this case, it will only become increasingly difficult to outperform the S&P 500 by investing in traditional fields that Buffett is good at.
Munger has also mentioned this repeatedly in his speech at the shareholders’ meeting.He said that the current investment market is no longer the same as when they were young. You can find good targets by looking for it a little bit, and investment is becoming increasingly difficult to do now.
Moreover, Berkshire Hathaway’s size is getting bigger and bigger, and it is a huge challenge for them to maintain a higher-index rate of return with such a large size.
In order to meet such challenges, investing in Apple is an attempt by two old men.
When answering shareholders’ questions about investing in Apple stocks, Munger said: The reason why the company began to try to invest in Apple is forced by the times.
As investment is becoming increasingly difficult, if you want to find a higher rate of return, you must try new breakthroughs and new areas.So, they chose Apple.
Munger also mentioned that when they first invested in Apple, they were not so sure, and they were also exploring while doing it, and they just walked along the way.
From this phenomenon and these details, we can also see that it is actually not easy to obtain returns that exceed the index in the medium and long term and stable manner in the stock market.
Therefore, the two old gentlemen repeatedly emphasized on many occasions that for ordinary investors who do not have time to study companies, the best way to invest in the stock market is to invest in index funds.
But most people think about getting rich overnight and are unwilling to become rich slowly.
