BRKB was among the worst performers today. On a longer term basis, investors in BERKSHIRE HATHAWAY INC made -0.06% per day. Tuesday's performance of -0.71% was a underperformance compared to it's daily average.
BRKB showed a strong bearish trend over the last 3 months. During this period BRKB delivered -11.06% and saw a maximum drawdown of -12.17%. It has been unusually choppy during this period. Long term investors are better off avoiding investing in BRKB till volatility reduces and a clear trend emerges.
BRKB has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 4 Jan, 2016 to 19 Nov, 2018. Over the last 2 years 11 months and 14 days, BRKB outperformed the SP500 index on 51% days.
BRKB was profitable on 53% days in the last three months. During this time, it delivered on average -0.17% per day. It delivered it's worst daily return of -4.84%, during this period, on Tuesday, 4 Dec, 2018. The longest stort-term trend during this period was 9 profitable days, which started on 29 Oct, 2018 and went on till 8 Nov, 2018. This bullish trend returned +11.51% to investors.
The last 12 months saw BRKB's investors making profits in 5 months and incurring losses in 7 months. BRKB was less consistent in delivering monthly returs than SP500 index. BRKB was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -9.95% compared to -7.75% returned by SP500 index in Dec 2018. BRKB had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Feb 2018 to Jun 2018) during which period it delivered -11.42%. It is interesting to note that both BRKB and SP500 index significantly outperform during months when quarterly/annual results are announced.
Greed is not a financial issue. It's a heart issue.
-- Andy Stanley
BRKB is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in BRKB's volatility from 5 Oct, 2018 to 11 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that BRKB has significant positive skewness in it's return distribution. This indicates that investors can expect BRKB to recover from drawdowns quickly. Which makes BRKB a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.
Investors trading in BRKB derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.
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