berkshire hathaway

[PRE]

Beta is a measure of systematic risk (i.e. a beta of 1.5 means a stock is 50% more volatile than the overall market). The beta I listed came from Yahoo and it measures the monthly price volatility of a stock over the past 3 years compared to the S&P. Systematic risk cannot be eliminated.

Unsystematic risk, which is the individual risk of a single security (ex. panera bread affected by the price of flour), can be eliminated by indexing. The S&P has much less unsystematic risk than any individual stock, even Berkshire. This is why it would be foolish to feel a portfolio consisting of only BRK would be a much better investment that that of the S&P 500.