Warren Buffett’s Berkshire Hathaway Stock Underperforms the Most Since 2009
wsj.com
wsj.com
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
The reasoning is that doing 4% when the market is in average doing 10% it is more or less the same as losing 6%
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.
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.
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.
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.
(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)
Buffett's first rule of money: "Don't lose money."