There’s a good chance that Berkshire Hathaway’s stock will lag the S&P 500 in the coming years. This is a matter of simple probabilities, and not a criticism of Berkshire Hathaway Chairman and Chief Executive Warren Buffett or his designated successors.

Investors are poised to study the letter Saturday for insights about the stock market.

Investors are awaiting Berkshire Hathaway Chairman Warren Buffett’s annual investor letter, in which he typically expounds on Berkshire’s performance along with anecdotes and vignettes about investing and life.

While some investors are likely to focus on the biggest-dollar moves made in the fourth quarter, such as the continued aggressive selling of No. 3 holding, Bank of America, the more telling action might be Berkshire's complete exit from the Vanguard S&P 500 ETF ( VOO 0.24%) and SPDR S&P 500 ETF Trust ( SPY 0.23%).

Berkshire entered a new holding in Constellation Brands during the fourth quarter of 2024. Buffett's firm also trimmed its position in Bank of America.

However, the Brookings Institute found that home insurance premiums increased 30% between 2020 and 2023 alone. The Berkshire Hathaway Home Services blog notes that this trend will