Berkshire Hathaway is a Counter-Cyclical Asset

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Dr. David Kass
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Although Berkshire Hathaway has slightly underperformed the S&P 500 over the past 10 years and approximately equaled it over the past 20 years, it has substantially outperformed this benchmark in each of the six years since 2000 that the S&P 500 had negative returns with dividends included.

In 2000, 2001, 2002, 2008, 2018 and 2022, the S&P 500 had an average return of -17.1% as compared to +7.2% for Berkshire Hathaway. Not only has Berkshire Hathaway approximated the performance of the S&P 500 in recent years, it has also performed as a counter-cyclical asset in each of the years that the S&P 500 registered negative total returns.

Year Berkshire Hathaway S&P 500 (with Dividends included)
2000 26.60% -9.10%
2001 6.50% -11.90%
2002 -3.80% -22.10%
2008 -31.80% -37.00%
2018 2.80% -4.40%
2022 +4.0% -18.10%
Average 7.20% -17.10%

Article by Dr. David Kass

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David I Kass Clinical Associate Professor, Department of Finance Ph.D., Harvard University Robert H. Smith School of Business 4412 Van Munching Hall University of Maryland College Park, MD 20742-1815 Phone: 301-405-9683 Email: (link sends e-mail) Dr. David Kass has published articles in corporate finance, industrial organization, and health economics. He currently teaches Advanced Financial Management and Business Finance, and is the Faculty Champion for the Accelerated Finance Fellows. Prior to joining the faculty of the Smith School in 2004, he held senior positions with the Federal Government (Federal Trade Commission, General Accounting Office, Department of Defense, and the Bureau of Economic Analysis). Dr. Kass has recently appeared on Bloomberg TV, CNBC, PBS Nightly Business Report, Maryland Public Television, Business News Network TV (Canada), Fox TV, American Public Media's Marketplace Radio, and WYPR Radio (Baltimore), and has been quoted on numerous occasions by Bloomberg News and The Wall Street Journal, where he has primarily discussed Warren Buffett and Berkshire Hathaway. He has also launched a Smith School “Warren Buffett” blog. Dr. Kass has accompanied MBA students on trips to Omaha for private meetings with Warren Buffett, and Finance Fellows to Berkshire Hathaway’s annual meetings. He is an officer of the Harvard Business School Club of Washington, DC, and is a member of the investment and budget committees of a local nonprofit organization. Dr. Kass received a Smith School “Top 15% Teaching Award” for the 2009-2010 academic year.