Good morning. More details are emerging about the congressional Republican’s proposed budget. The House version, in its current form, adds more to the deficit than many investors had expected, and makes bigger cuts to social programmes than Democrats had feared. 10-year Treasury yields climbed 7 basis points yesterday. Email us: robert.armstrong@ft.com, aiden.reiter@ft.com and hakyung.kim@ft.com. 

More on Berkshire’s outperformance

Last week we wrote a couple of pieces about the remarkable long-term performance of shares in Berkshire Hathaway. We emphasised that, as Andrea Frazzini and his colleagues at AQR have argued, a lot of Berkshire’s strong performance is explained by exposure to standard performance “factors” such as value, quality and low volatility — mixed in with some leverage and a lot of years.

Edward Finley of Arrow Wealth Advisory, a friend of Unhedged, did his own regression analysis between Berkshire’s A-share performance and six canonical factors from 1996 through to the start of 2025. That’s shorter than Frazzini’s study period (1976-2016) but more up to date. What Finley found is summarised in the table below. It is full of horrible statistical terms, but I’ll walk you through it (my own stats knowledge is thin, so actual experts can email to correct me if I mess it up):