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>> Both the DOW and the S&P have beaten it for the last five years.

This is true. However, Berkshire also tends to significantly outperform the indices in a bad market. It's not unusual for Berkshire to be *up* during a bad market. For one thing, the large cash position tends to cushion the fall; secondly, a long bear market gives Berkshire more acquisition targets at a good price. Both of these tend to make Berkshire attractive in weaker markets.

It was up more than 60% from March 2000 to May 2002 during the vicious bear market of that time frame, and it's been my observation that Berkshire is often rising during corrections (or at least staying nearly flat). I think it's a good way to reduce volatility.

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