Warren Buffett is undoubtedly one of the greatest investors of our time. Though the Oracle of Omaha can’t actually see into the future, his knack for picking the right horse is almost unmatched. Guided by a disciplined philosophy, Buffett believes in backing businesses that have firm competitive advantages, or “moats,” and keeping his money parked for the long haul. As he said in his 2023 letter to Berkshire shareholders: “When you find a truly wonderful business, stick with it. Patience pays.”
As the head of Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), he helped build the kind of company he loves to invest in. Berkshire is a wonderful company with solid business fundamentals, an established moat, and an incredible management team. Under his leadership, the company’s stock has soared.
Berkshire is in a solid position today. Aside from the investments it’s famous for, like those in Apple or American Express, its insurance businesses are the backbone of Berkshire. The segment is doing well, with its first-quarter 2024 net underwriting earnings nearly tripling year over year and nearly doubling year over year in Q2 2024. GEICO, its biggest insurance brand, continues to have some of the lowest costs in the industry.
You would be pretty happy if you had invested 30 years ago
A $10,000 investment in Berkshire 30 years ago would now be worth over $363,000, a 3,530% gain or 12.7% annualized. That’s nearly four percentage points better than the average annual return of the S&P 500 over the same time period. Perhaps a difference 4% per annum doesn’t sound like all that much, but the power of compound interest is hard to understate. Over 30 years, that 4% difference means your investment returned almost 200%, or three times, more.
While investing in Berkshire earlier would have been ideal, it’s still a great company today. Buffett is aging, yes, but the company continues to make strong investment choices and increase shareholder value. Berkshire will remain guided by its enduring philosophy and values, carrying on Buffett’s legacy when he steps down.
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American Express is an advertising partner of The Ascent, a Motley Fool company. Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and 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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