Buffett in Foresight and Hindsight
Santa Clara University - Department of Finance
Assante Asset Management Inc.
Santa Clara University Working Paper No. 00/01-37
The price of Berkshire Hathaway shares increased at a rate more than double the rate of the S&P 500 Index, from $18 on May 10, 1965, when Warren Buffett took control of the company, to $71,000 by the end of 2000. We show that while some investors saw Berkshire Hathaway?s amazing performance in foresight, investors as a whole did not. We use this evidence to discuss the pitfalls of hindsight in the assessment of investment foresight.
Number of Pages in PDF File: 20
Keywords: Buffett, Cognitive Biases, Behavioral Finance, Market Efficiency, Performance Evaluation
JEL Classification: G14
Date posted: July 22, 2001