The history of Warren Buffet is nothing short of amazing. He has a 54 year record of 23% per year. When you see a graph of his net worth you think all of this occurred late in life. In dollar terms – yes. In performance – no. The difference is that compounding makes it look like all the performance is in the later years.

I estimate he outperformed the S&P by 21% per year his first 27 years. The next 12 years are referred to as the lost decade. During this time he outperformed the S&P by 6% per year. In the last 15 years his performance was about equal the S&P.

He will tell you that over time scalability became a problem. There were not enough great deals. Also the S&P comparison became more difficult as the S&P rose 11 percentage points over the past 15 years.
Without AAPL over the past 10 years Berkshire Hathaway would have underperformed the S&P by about 12 percentage points per year. The problem is that the great buys Warren makes are value stocks. Sometimes these take a long time to reach their full potential.

To outperform the S&P you have to have some volatility in your portfolio. In the past AAPL provided that. The best performance improver I know of is TQQQ. It is twice as effective at raising performance as AAPL. As far as quality goes it owns on a weighted basis mostly the best 1.5 % of all 6,000 stocks.

Greg, you can beat the S&P otherwise I would not have titled my book “Earn Twice the S&P”