Warren Buffett's Compounders Crush Cathie Wood's Disruptors Over The Long Haul
Warren Buffett and Cathie Wood may both be stock-picking legends, but their portfolios might as well be from different galaxies. While Buffett cruises the investing seas with old-school juggernauts, Wood launches rockets hoping they'll land on the moon – or at least avoid burning up on re-entry.
Tech Vs. Tact: A Tale Of Two Strategies
Data from HedgeFollow suggests that in the fourth quarter of 2024, Buffett's Berkshire Hathaway Inc (NYSE:BRK) (NYSE:BRK) clocked in a respectable 2.74% gain, quietly pushing his war chest to a towering $267 billion.
Meanwhile, Cathie Wood's ARK Innovation Fund (BATS:ARKK) lit up with a scorching 23.82% quarterly return – but before ARK fans pop champagne, the long-term picture tells a more sobering story.
Over the past three years, Buffett's top 50 holdings (weighted) returned +20.29%, while Wood's delivered a bruising -33.63%. That's not just a bad quarter – it's a full-blown crash landing.
Buffett's Billion-Dollar Boring Works Brilliantly
The difference?
Buffett's portfolio is a fortress of slow-burning compounders. His crown jewel, Apple Inc (NASDAQ:AAPL), takes up 28% of his portfolio and has returned a jaw-dropping +438.8% from its average buy price.
Throw in American Express Co (NYSE:AXP) (+277.6%), Bank of America Corp (NYSE:BAC) (+55.8%) and Coca-Cola Co (NYSE:KO) (+77%), and it's clear the Oracle of Omaha is still the king of buying great companies at great prices… and holding them forever.
Cathie's High-Flyers Keep Crashing Back To Earth
Cathie Wood, on the other hand, is all about "disruption" — and sometimes, the disruption is in her portfolio’s value. Take Roku Inc (NASDAQ:ROKU), down 46.6% from her average buy-in, and Block Inc (NYSE:XYZ), down -50.1%. Her top bets, like Tesla Inc (NASDAQ:TSLA) and Coinbase Global Inc (NASDAQ:COIN), have had moments of glory, but the overall portfolio has been whipsawed by volatility and drawn-out tech drawdowns.
To her credit, Wood’s fourth-quarter comeback shows that high-beta bets can pay off—just not consistently. While her fund has a whopping 181 holdings, many are moonshots still waiting for liftoff.
Overall, Buffett's performance shows the power of patience and pricing. Wood? She's still betting on the future – but it seems Buffett is quietly owning it.
Which camp would you rather retire in – the steady compounder or the volatile visionary?
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