Buffett Vs. S&P 500: Will Oracle Of Omaha's Last Year As Berkshire CEO Go Down As Underperformance?

Core Viewpoint - Warren Buffett will step down as CEO of Berkshire Hathaway at the end of 2025, a position he has held since 1970, and the company is currently trailing behind the S&P 500 index in performance [1][4]. Performance Comparison - Historically, Buffett and Berkshire Hathaway have outperformed the S&P 500 in many years, achieving better returns in 11 of the last 20 years and three of the last four years [2]. - In 2022, while the S&P 500 was down 17.5%, Berkshire Hathaway managed to increase by 3.3%, showcasing its resilience during market downturns [3][8]. - Year-to-date performance for 2025 shows Berkshire Hathaway up 13.5%, compared to a 16.7% gain for the S&P 500 ETF [4][8]. Recent Developments - In the last month, Berkshire Hathaway shares increased by 7.4%, while the S&P 500 saw a slight decline of 0.4%, indicating a potential closing of the performance gap [5]. - Berkshire Hathaway made a significant purchase of 17,846,142 shares of Alphabet Class A, which has become one of its top 10 holdings, reflecting a strategic bet on AI and future technology [6][7]. Investment Strategy - The company has been reducing its stake in Apple Inc while increasing its investment in Alphabet, indicating a shift in focus towards technology and growth sectors [7]. - Other major holdings like American Express, Bank of America, and Coca-Cola have outperformed the S&P 500 year-to-date in 2025, contributing to the overall portfolio strength [7]. Market Sentiment - The potential underperformance of Berkshire Hathaway in 2025 may be attributed to investor sentiment regarding Buffett's impending departure, leading to reduced confidence in the investment team's stock picks [9].