A recent article by Bloomberg columnist Nir Kaissar highlights the investing gifts of billionaire CEO Warren Buffett—who recently released his annual letter to Berkshire Hathaway shareholders.
Kaissar underscores how Buffett has routinely beaten the market by investing in companies that are “highly profitable and selling at a reasonable price.” But Kaissar notes that Buffett has done so by a wide margin, even after factoring in profitability and value premiums. “The per-share market value of Berkshire has returned 20.9 percent annually from October 1964 through 2017, according to the company,” he writes. “That’s an astounding 9 percentage points a year better than a 50/50 portfolio of the Fama/French profitability and value indexes for more than five decades.” According to Kaissar, this constitutes far more than good luck. The article outlines a variety of data points to support this argument, including those of growth funds and “bot” stock picking strategies.
“Good luck finding another stock picker like Buffett,” the article concludes, adding, “let’s take a moment to acknowledge a master. The bots will never catch a Buffett.”