Reflections on Compounding, Complexity, and Clarity
Thoughts on Buffett at 95, political irony in Westminster, and cleaner investing.
Berkshire Notes
Happy 95th Birthday to Warren Buffett! Few people have given investors as much wisdom, storytelling, and lived proof of patient decision-making as he has. Generations will continue to benefit from his clarity and discipline.
When Buffett was 45 - roughly my age - his net worth had already reached $40M. Adjusted for inflation, that’s about $250M today. Compare that with his current wealth of ~$150B: more than 600 times the inflation-adjusted figure. Over the past 50 years, he hasn’t just kept pace with inflation - he’s compounded far beyond it. A remarkable testament to the power of sound investing, patience, and time.
On Berkshire stock itself—have you noticed the unusual volatility lately?
Even on days when the S&P 500 barely moves, Berkshire has been swinging sharply. This feels like a recent development, raising the question: who exactly is doing all this buying and selling?
Finally, here’s an interesting long-term chart: 12 years of BRK-B vs SPY (market price ratio).
A few observations:
The ratio has been steadily inching upward, with Berkshire’s $498 price getting close to SPY’s $645. They even reached parity earlier this year.
Over the past 13 years, Berkshire has compounded almost identically to SPY. That’s remarkable, given Berkshire’s far less “tech-heavy” portfolio and its conservatism around leverage.
The catch: SPY distributes dividends, Berkshire doesn’t - so total return parity remains.
Still, it’s proof that a supposedly “boring” balance-sheet-first company can keep up with, and sometimes even outpace, the market.
Angela Rayner
Switching gears - Angela Rayner, the UK Deputy Prime Minister, resigned after revelations that she had underpaid taxes. This isn’t a political take, but two points are worth noting.
First, earlier this year Rayner circulated a memo advocating for higher taxes, including on property. Yet her own career unraveled over tax issues. If even those pushing for heavier taxation find the system unworkable, is it time the UK re-examined its left-leaning assumptions on taxation? Perhaps too much to ask, but worth reflecting on.
Second, Rayner has held roles as Housing Secretary and Deputy PM. If someone in such positions can’t navigate her taxes correctly, doesn’t that speak volumes about how complex and unwieldy the UK tax code has become? When ordinary citizens need flowcharts and specialists to get it right, perhaps the system itself needs redesigning. Again, maybe I’m asking for too much.
Portfolio Update
On to markets closer to home—a quick portfolio update.
I’ve long held three ETFs for India exposure, mostly due to historical reasons. As part of my 2025 theme of simplification, I’ve now consolidated. Positions in SMIN and INDY are gone, rolled into a single holding: IIND. Cleaner, simpler, easier to track.
The other change is the addition of Trade Desk (TTD), about which I wrote in my last post, though at a modest starting allocation of 1.43%. That’s intentional - I expect to build the position gradually over time. As a trivia, TTD is the youngest company at 16 years old, to enter the Coffee Can Portfolio - median age of the portfolio is now a sprightly 72!!
With those updates in place, here’s to disciplined investing, thoughtful simplification, and opportunities ahead. Happy Investing!
Disclaimer: I am not your financial advisor and bear no fiduciary responsibility. This post is only for educational and entertainment purposes. Do your own due diligence before investing in any securities. I may hold or enter into, a position in any of the stocks mentioned above. The above is NOT a solicitation to either buy or sell the securities listed in this post.