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Buffett's Berkshire Hathaway Drops 32% In 2008, But Still Beats S&P For Third Straight Year

Shares of Warren Buffett's Berkshire Hathaway lost almost a third of their value in 2008, but the stock still managed to outperform the benchmark S&P 500 stock index for the third consecutive year.

Berkshire's Class A shares ended the year at $96,600 each. That's a drop of 31.8 percent from 2007's closing price of $141,600. It's Berkshire's worst performance in the roughly three decades for which we have data.

The S&P fell 38.5 percent during 2008, excluding dividends, its worst year since 1931.

Berkshire suffered steep losses in the fourth quarter of the year. On September 19, it closed at its highest point of the year: $147,000.

The lowest close of the year came just two months later: $77,500 on November 20. That's a drop of 47.3 percent over 8 weeks. Apparently sparking the selling: Berkshire's disappointing third quarter earnings report, including big paper losses on long-term bets that stocks will eventually recover.

It proved to be a short-term buying opportunity. The year-end close is 24.7 percent above that November low. Buffett's late-November promise to deliver more information on those derivative positions appeared to help the stock. Barron's also called Berkshire "cheap" around the same time.

Over the past three years, Berkshire's stock is up 9.0 percent, while the S&P is down 27.6 percent.

Since 1977, Berkshire has outperformed the S&P in 24 out of 32 years. Buffett's average annual gain is 28.4 percent, compared to 8.3 percent for the S&P.

Here's the updated scorecard. Berkshire's winning years are highlighted in blue.

Happy New Year from Warren Buffett Watch, and from everyone at CNBC and CNBC.com.

Current Berkshire stock prices:

Class A:

Class B:

Questions? Comments? Email me at buffettwatch@cnbc.com

Symbol
Price
 
Change
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BRK.A
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