Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) is well-known for delivering incredible returns for investors in the 60 years since Warren Buffett took control of the company — and for good reason. Since Buffett took over in 1964, Berkshire has delivered an unbelievable 4,384,748% total return for investors.
Think about that for a minute. This means that a $10,000 investment in Berkshire at that time would be worth $438 million today. For comparison, a $10,000 investment in the S&P 500 over the same period would be worth $3.1 million — still a respectable return, but not in the same ballpark.
What if you were late to the party?
That massive total-return figure makes an excellent statistic for writers like me to use. But the reality is that even most of the long-term investors reading this don’t have a 60-year time horizon in mind. And let’s face it — very few people would have been interested in Berkshire Hathaway at the time (it was little more than a struggling textile company).
Berkshire Hathaway over the past 30 years
With that in mind, let’s look at a more conceivable long-term investment time horizon — 30 years. Let’s say that you invested $1,000 in Berkshire Hathaway 30 years ago. At that point (1994), Warren Buffett had been in charge for four decades and Berkshire was already a massive success story.
However, Berkshire has continued to deliver market-beating performance. A $10,000 investment 30 years ago in Berkshire Hathaway would be worth $377,000 today. That’s a 12.8% annualized return — still well above the long-term average of the S&P 500.
The point is that thinking you’re “late” to an investment that has been a winner for decades is a faulty mindset. In simple terms, winners keep on winning. And Berkshire Hathaway is a great example of that.
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Matt Frankel has positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.
If You’d Invested $10,000 in Berkshire Hathaway Stock 30 Years Ago, Here’s How Much You’d Have Today was originally published by The Motley Fool
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