Robert Armstrong, Oliver Ralph and Eric Platt: Warren Buffett: ‘I’m Having More Fun Than Any 88-Year-Old in the World’: "Warren Buffett. Over the past 54 years, shares in his company, Berkshire Hathaway, have outpaced the S&P 500—a broad index of American stocks—by almost 2.5 million percentage points. The degree to which Buffett has outwitted successive generations of Wall Street rivals almost defies comprehension. It is striking, then, that over the past decade Buffett has fallen behind. A dollar invested in Berkshire 10 years ago is worth about 2.40; the same dollar in an S&P 500 tracker fund is worth 3.20. More striking still is what Buffett says about this.... 'I think this: if you want to join something that may have a tiny expectation of better [performance] than the S&P, I think we may be about the safest'.... Every working day, $100m rolls into Berkshire—cash from its subsidiaries, dividends from its shares, interest from its treasuries. Something must be done with it all. The porridge is starting to overrun the house.... If the problem is too much money, a natural response would be to get rid of some. Companies do this all the time: they pay dividends or sell off business units. Why not get smaller, so that Berkshire can get back to producing outsized returns?... The only way Buffett will countenance reducing the company’s massive pile of shareholder equity is to buy back shares when they are selling at a price he thinks is lower than their true value.... But what happens when Berkshire’s shares are trading at a fair price, and companies and stocks look expensive too? 'That’s my nightmare', Buffett says...
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