Skip to main content

Market Overview

Rolfe: Berkshire Still Better Bet Than Small Caps


David Rolfe, chief investment officer of Wedgewood Partners, recently provided an update on a 10-year market bet he made with Marketwatch columnist Nicholas Vardy about two years ago.

The bet was that, over a 10-year stretch starting last March, Berkshire Hathaway Inc. (NYSE: BRK-B)’s stock would outperform the Vanguard Russell 2000 ETF (BMV: VTWO).

After two years, Berkshire’s shares are up about 18.0 percent, while the Russell 2000 ETF is down 8.0 percent.

Looking ahead to the next year, Rolfe predicts that Berkshire will continue to widen its performance gap over small-cap stocks. He sees long-term growth and valuation advantage for Berkshire and its holdings. This advantage makes the stock a favorable long-term investment to small caps in either an up or down market.

Related Link: MIT Researchers: Here's Where To Look For The Next Amazon Or Facebook

“I’m not clever enough to figure out if Corporate America is [in] an 'earnings recession,' but if I was a betting man and had to take the over or under on the prospect for robust earnings growth over the next 12 months, I would take the under,” Rolfe wrote.

Rolfe pointed out that Berkshire currently trades at only 1.3x book value and that Warren Buffett himself has repeatedly expressed his desire to buy back shares of the company at 1.2x book value. That buying could mean some major support for the stock in the $125 level if the market deteriorates further in the near future.

Disclosure: The author holds no position in the stocks mentioned.

Latest Ratings for BRK-B

Nov 2014BarclaysMaintainsOverweight
Oct 2014BarclaysMaintainsOverweight
Mar 2014BarclaysMaintainsOverweight

View More Analyst Ratings for BRK-B
View the Latest Analyst Ratings


Related Articles (BRK-B + VTWO)

View Comments and Join the Discussion!

Posted-In: David Rolfe Marketwatch Nicholas VardyAnalyst Color Broad U.S. Equity ETFs Analyst Ratings Trading Ideas ETFs

Latest Ratings

LBCredit SuisseMaintains36.0
TRGPCredit SuisseMaintains40.0
SNOWCredit SuisseMaintains275.0
DARCredit SuisseMaintains95.0
CLRMKM PartnersDowngrades26.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at