Backtest: Buy and Hold BRK-B (Berkshire Hathaway Inc.)

This analysis evaluates a buy-and-hold strategy over the past 29 years, providing a historical perspective on BRK-B's performance from 1996-05-09 to 2025-07-03.

Note: This simulation uses adjusted close prices, meaning all historical prices have been retroactively adjusted for splits and dividends. To achieve similar results in practice, you would need to reinvest all dividends automatically as they are paid.

Performance Overview

Starting with an initial capital of $10,000.00, we purchased shares of BRK-B on 1996-05-09, at a price of $23.20 per share (adjusted for splits and dividends). No trading, no adjustments — just a simple buy-and-hold approach.

We held the position continuously through every market twist and turn, never selling. As of 2025-07-03, the price of BRK-B had risen to $485.00. While we didn't sell, we can still assess the performance by calculating the current value of the investment: $209,051.72 — a total gain of 1,990.52%.

This translates into an annualized return of 10.99% over the entire period. This return is closely aligned with the typical long-term growth rates of diversified equity investments — a realistic and respectable outcome for a passive strategy.

Drawdown and Risk

The maximum drawdown recorded during this period was 53.86%. This drawdown began after a peak price of $99.70 on 2007-12-10, and reached its lowest point on 2009-03-05 when the price fell to $46.00. The drawdown lasted for 451 days.

The drawdown was substantial, though not uncommon for long-term equity strategies that span full market cycles. This level suggests exposure to significant corrections or crashes. The maximum drawdown lasted over a year, indicating an extended period of underperformance. This duration is typical of major corrections or bear markets.

The Calmar Ratio — annualized return divided by maximum drawdown — was 0.20, reflecting the tradeoff between return and volatility.

This level is typical for diversified investments that face substantial drawdowns alongside steady long-term returns.