Warren Buffett’s Berkshire Hathaway has lagged behind US tech stocks over the past two decades, according to new analysis from DataTrek. The investment firm found that an investor who put $10,000 into Berkshire 20 years ago would now have $65,300. However, that same investment in the NASDAQ would be worth a significantly higher $110,700 today.
Analyst Jessica Rabe of DataTrek asked, “Would you rather have Warren Buffett manage your money or put it to work in a broad basket of US public technology companies?” Despite Berkshire Hathaway owning companies such as Geico and BNSF Railway, the data from DataTrek compares their stock against tech benchmarks. According to their findings, QQQ and XLX have outperformed Berkshire stock by 454 percentage points and 280 points, respectively, over the last 20 years.
Tech ETFs have also outperformed Berkshire over the past 5, 10, and 15 years. The QQQ and XLX have gained 67 and 109 percentage points more than BRK since 2018, and 149 and 226 points more since 2013. QQQ grew 762 points more and XLX grew 651 points more than BRK in the last 15 years.
The analysis by Rabe pointed out that Berkshire tended to outperform tech during certain periods, like during rebounding financial and value stocks, yet QQQ and XLX used disruptive innovation to their advantage. In contrast, some of BRK’s top holdings are in more traditional industries like Coca Cola, Kraft, and Chevron.
Overall, the report showed that tech stocks have driven the broader market this year, with companies such as Nvidia, Apple, and Microsoft leading the way. As a result, while BRK has underperformed the S&P 500, tech stocks alone have also outperformed the rest of the benchmark index.
The contrast between Berkshire Hathaway and US tech stocks is captured in a graphic from DataTrek, highlighting the lag in performance over the past 20 years.
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