Outperforming S&P by 19.2 percentage points in a month: Berkshire (BRK.B) had the biggest monthly comparative advantage since 2010, second only to the 2008 financial crisis

The Zhitong Finance App learned that at a time when AI trading declined and technology stocks were shaking, one of the oldest “safe havens” in the market once again proved its worth. Berkshire Hathaway (BRK.B) has just recorded one of its most notable relative gains in over a decade.

How rare is the data: surpassed only three times in 30 years

In the month ending last Thursday, the conglomerate outperformed the S&P 500 (SP500) by 19.2 percentage points — its biggest rolling monthly comparative advantage since 2010 and the fourth largest gap record in the past 30 years. Only the turbulence of the 2008 financial crisis caused a wider gap: Berkshire led the market by 29.6 percentage points back then.

This divergence stems from a sharp contrast in the absolute performance of the two sides: in the past month, Berkshire shares rose 13.2% to a record high; while the S&P 500 index fell 3.7% over the same period. By the close of trading this Tuesday, the gap between the two had narrowed slightly to 16.9 percentage points, but in the record since comparable data was available in 1996, this level is still rare.

In just half a year, offense and defense changed. Just in May of this year, Berkshire was still 14.3 percentage points behind the S&P 500 index — at the time, the market was immersed in the rising sentiment of the AI market. The index of heavy technology stocks led the way, while Berkshire, which mainly focuses on traditional operating businesses such as insurance, railways, and energy, appeared to be slow.

Why Berkshire: Cash, Operating Businesses, and “Not Betting on a Single Narrative”

This rapid reversal highlights how quickly the market environment can shift to the structural characteristics of the company — a cash-rich balance sheet and a mature operating business portfolio.

The logic is not mysterious: when the focus of market concerns changed from “whether AI can rise faster” to “whether the huge debt of AI infrastructure can be recovered”, the anchor of valuation returned from dreams to cash flow. Berkshire's huge cash reserves are often criticized as “inert assets that drag down yields” in bull markets, but in an environment where risk appetite shrinks and credit spreads widen, it is both a buffer against fluctuations and a “dry powder” that is always on standby — the higher the level of market panic, the greater the option value of this cash.

At the same time, the profits of its operating businesses such as BNSF railways, energy, and insurance come from the needs of the real economy rather than the continuation of any single popular story. From chip stocks to computing power vendors, the volatility of AI-related assets increased dramatically this week — and Berkshire's profit structure had little direct exposure to this narrative.

Putting the current gap in the 30-year dimension, it is second only to the 2008 financial crisis — it was also a period of “cash and certainty getting premiums, and leveraged and narrative assets being sold off.” History seems to suggest a simple rule: Berkshire's excess profits are often not born in a bull market, but are realized when the market relearns awe.

It is important to note that the sustainability of this comparative advantage is highly dependent on the continuation of the market environment: if AI sentiment recovers and risk appetite recovers, Berkshire's gap with respect to the general market may narrow again like this Tuesday. For investors, the 19.2 percentage point record is not that a company has become stronger, but that the market has repriced “certainty” itself.