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How can SPY only be up by 12% if the companies that have a high weight
in it outperformed BRK, which is up 22% ? Doesn't add up.


I am sure Jim will give you a better and more detailed answer than mine
but I think he means that the equal weighted average return is 22%.
The confusion seems to be arising from the fact that the S&P 500 is a
value weighted average. For example, consider a stock market with just 2
stocks - A & B. A has a market cap of $100 billion while B has a market
cap of just $10 billion. Assume that A has just returned 10% over the
last year while B has returned 30%. Then the value weighted average
(equivalent of the S&P 500) return would be (100/110)*10 + (10/110)*30 =
11.82% while the equal weighted average (the equivalent of the average
company's return) would just be 1/2*10 + 1/2*30 = 20%.

The difference between the 12% and 22% is because small cap stocks in the
S&P 500 (a bit of an oxymoron?) have done much better than the large cap
ones. Interestingly, a glance at Ken French's website tells me that SMB
last year was only 0.59% so this apparently was not true for the broader
market.
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