Berkshire Hathaway is on track to lag behind the S&P 500 in Buffett’s last year as CEO

(This is the Warren Buffett Watch newsletter, news and analysis on all things Warren Buffett and Berkshire Hathaway. You can sign up here to receive it every Friday evening in your inbox.)

Just before Warren Buffett surprised shareholders in early May with his plan to step down as CEO at the end of the year, Berkshire Hathaway’s B shares were outperforming the benchmark S&P 500 by 22.4 percentage points in 2025.

Over the following three months, BRKB fell 14.9% to a post-meeting closing low of $459.11 on August 4.

Since that date, it has rebounded by 9.9% to close at $504.34, up 11.3% year-to-date.

But it hasn’t been enough to catch up with the S&P’s 37.9% surge since its closing low of the year of 4982.77 on April 8.

After a four-day winning streak, the index ended today at 6870.40, just 20 points below its all-time closing high in late October, and up 16.8% year-to-date.

So, with 17 trading days remaining in 2025, and 26 calendar days until Greg Abel takes over as Berkshire’s CEO, Berkshire’s B shares are trailing the S&P by 5.5 percentage points.

They had been down 12.2 percentage points on October 29 and came with 0.6 percentage points of drawing even on November 20.

This isn’t the full story, however, because Buffett likes to compare Berkshire’s stock performance to the S&P with dividends included.

That gives the index another 1.4 percentage points for a total YTD gain of 18.2%, almost 7 percentage points ahead of Berkshire.

Melinda French Gates says The Giving Pledge, which she launched in 2010 along with Bill Gates, her former husband, and Warren Buffett has more work to do to achieve Buffett’s goal of changing “the norm around what is expected of people with great wealth.”

The Pledge’s website says that “more than 250 of the world’s wealthiest philanthropists” have promised to “give the majority of their wealth to charitable causes in their lifetime or wills.”

In an appearance on Wired’s “The Big Interview” podcast this week, French Gates said, “I wish we had been even more successful with the pledge than we have been to date; it’s a problem to continue working on.”

Have those making the pledge been “actually giving money?”

“Some of them, yes, some of them at massive scale, and we are trying to demonstrate through the pledge that you can give at massive scale. But have they given enough? No. You know, some are doing it, and some are trying or aren’t ready to.”

She acknowledged a key problem is getting very wealthy people to begin giving away their money, in part because “it takes a while to know which organizations you can trust to be effective with your money.”

And if you create your own vehicle, “Who do I hire that I can trust so that it stays with my values, my mission?”

“There are a lot of barriers that keep people from starting, but we know what they are. Once you start, you can build a flywheel and then we’re trying to demonstrate for them: Go big. You can go big, you can go bold.”

VIDEO: In 2018, Bill and Melinda Gates Foundation co-chair and co-founder Melinda Gates sat down with CNBC’s Becky Quick to discuss how the foundation was aiming to improve global health and eliminate poverty.

In August, a report from the Institute for Policy Studies argued the Giving Pledge is “unfulfilled, unfulfillable, and not our ticket to a fairer, better future,” with many early pledgers getting “far wealthier since they signed.”

A Giving Pledge spokesperson called the report “misleading” with incomplete data that excludes “significant forms of charitable giving,” including contributions to foundations.

Warren Buffett explains why it’s important to look at what he calls a company’s “moat,” its ability to maintain an advantage over competitors.

AUDIENCE MEMBER: I’d like you to drill down with us and tell us what, to you, are the signs of great management and economic moats…

WARREN BUFFETT: The moat and the management are part of the valuation process, in that they enter into our thinking as to the degree of certainty that we attribute to the stream of income — stream of cash, actually — that we expect in the future and the amount of it.

I mean it is, you know, it is — it’s an art, in terms of valuation of businesses. The formulas get simple at the end.

But if you and I were each looking at the chewing gum business — we own no Wrigley, so I use Wrigley fairly often in class — pick a figure that you would expect unit growth of chewing gum, you know, to grow in the next 10 or 20 years.

Give me your expectations on how much pricing flexibility you have, how much danger there is that Wrigley’s share of market is dramatically reduced. You can go through all of that. That’s what we go through.

That is — and in the — in that case, we are evaluating the moat. We are evaluating the price elasticity, which interacts with the moat in certain ways. We’re evaluating the likelihood of unit demand changing in the future. We’re evaluating the likelihood of the management being either very bright with the cash that they develop or being very stupid with it.

And all of that gets into our evaluation of what that stream of money looks like over the years.

But the value of — how the investment will — works out depends on how that stream develops over the next 10 or 20 years…

If you have a big enough moat, you don’t need as much management.

You know, it gets back to Peter Lynch’s remark that he likes to buy a business that’s so good that an idiot can run it, because sooner or later one will. Well — (Laughter)

That’s — I mean, he was saying the same thing. I mean, he was saying that what he really likes is a business with a terrific moat where nothing can happen to the moat. And there aren’t very many businesses like that. But then — so you get involved in evaluating all these shadings.

This [a can of Coca-Cola], not the cherry version, but the regular version — this one, has a terrific moat around it. There’s a moat even in this, you know, in the container.

You know, I — there was some study made as to what percentage of the people could identify blindfolded what product they were holding just by grabbing the container. And there aren’t many that could score like Coca-Cola in that respect.

So here you’ve got a case where that product has a share of mind. If there’s 6 billion people in the world — I don’t know what percentage of them have something in their mind that’s favorable about Coca-Cola, but it would be a huge number.

And the question is, 10 years from now is that number even larger, and is the impression just a slight bit more favorable, on average, for those billions of people that have it? And that’s what the business is all about.

Holdings are as of September 30, 2025, as reported in Berkshire Hathaway’s 13F filing on November 14, 2025, except for:

The full list of holdings and current market values is available from CNBC.com’s Berkshire Hathaway Portfolio Tracker.

Please send any questions or comments about the newsletter to me at alex.crippen@nbcuni.com. (Sorry, but we don’t forward questions or comments to Buffett himself.)

If you aren’t already subscribed to this newsletter, you can sign up here.

Also, Buffett’s annual letters to shareholders are highly recommended reading. There are collected here on Berkshire’s website.

— Alex Crippen, Editor, Warren Buffett Watch