Now that the decade has ended, I wanted to see how Berkshire Hathaway (ticker:BRKA) has performed relative to earlier periods. I looked at market prices for the last three decades along with book value growth. While BRKA did outperform the S&P 500 in the last decade, the 5.85% annualized return is somewhat of a disappointment. The main problem is size. Apparently even Warren Buffett finds it impossible to earn consistently high double digit returns with more than $100 billion under management.
Market Price Appreciation
The Oughts: 12/31/1999= 56,100 12/31/2009= 99,155 Annualized Return= 5.86%
The Nineties: 12/29/1989= 8,675 12/31/1999= 56,100 Annualized Return= 20.52%
The Eighties: 12/79/1979= 320 12/29/1989= 8,675 Annualized Return= 39.10%
Book Value Annualized Return
The Oughts (est.)= 8.0%
The Nineties = 24.3%
The Eighties = 29.0%
The Seventies = 22.4%
The price to book of BRKA is currently around 1.2 which is historically quite low. Normally a purchase of BRKA at a price to book of 1.50 or less works out pretty well in the long run. But it is highly unlikely that BRKA will again earn 20+% annualized returns in the next decade because of its huge size.
Full Disclosure: Long BRKA