Warren Buffett Thinks You Should Buy This Stock in 2014
Warren Buffett thinks you should buy his stock Berkshire Hathaway (NYSE: BRK-A ) (NYSE: BRK-B ) this year. And you'd be smart to listen to him. Here's why.
The first five-year lag
Much has been made of the reality that, for the first time in its history, Berkshire Hathaway saw its growth in book value trail the S&P 500 over a five-year period.
As a result, many have questioned if Buffett has finally lost it, and others believe Berkshire Hathaway should be cast aside for different compelling investments. Yet, such a plan would be a terrible idea.
During the true market cycle from 2007 to 2013, Berkshire outperformed the S&P 500, and Buffett noted, "through full cycles in future years, we expect to do that again." Yet, Buffett added a critical distinction about what to truly expect from Berkshire Hathaway.
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Warren Buffett Thinks You Should Buy This Stock in 2014 (BRK-A, BRK-B)