"Eight years ago, Dividend Growth Investor (DGI) asked me if I'd like to participate in the Warren Buffett bet. For those unfamiliar, in 2008 Buffett famously challenged the hedge fund industry: Can you beat the S&P 500 over a period of 10 years? Buffett won as the hedge fund got clobbered by the S&P 500. But I like fun experiments and a little drama, so I agreed. Here is how it's going."
"2025 was great! I extended my lead over the S&P 500 by quite a bit: A 13.8% beat is pretty great! My compound annual growth rate is 16.2%. I'll take that all day (and life) long. But there are only 4 stocks in my Warren Buffett Bet Portfolio and they're quite volatile. If any one of them take a big hit in the next 2 years, I'll be in trouble."
"I worry about the long-term prospects of this one. Berkshire's top 3 businesses are insurance, trains (BNSF), and energy. All of these business could be disrupted by technology soon. Autonomous cars will be much safer than human driven ones, cutting margins for insurance companies. Autonomous trucking will supplant some of what trains so. Energy is changing fast, although maybe this will be a boon for Berkshire as demand surges."
A four-stock, equally weighted buy-and-hold portfolio has produced a compound annual growth rate of 16.2% through eight years, outperforming the S&P 500 by 13.8%. The portfolio returned strongly in 2025, extending the lead, with Google delivering especially large gains while two of the four holdings underperformed. The portfolio carries concentration and volatility risk because only four stocks are held; a major loss in any single holding could jeopardize the edge. Berkshire Hathaway raises long-term concern due to exposure to insurance, rail, and energy, each potentially disrupted by autonomous vehicles, autonomous trucking, and rapid energy change. Amazon's AWS remains a durable advantage, while Alibaba appears to have been a poor pick.
Read at 1500 Days to Freedom
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