It’s hard to go wrong investing with Warren Buffett. He’s averaged annual gains near 20% for nearly 60 years.
Just about everyone who might read this article probably knows that Warren Buffett, CEO of Berkshire Hathaway (NYSE: BRK.A) (BRK.B 0.24%), has been a phenomenal investor — for decades. He displays his company’s growth and performance over the years in each annual report, and per the last one (for 2023), the overall gain from 1965 to 2023 was 4,384,748%. Yes, that’s 4.3 million! Annualized, it’s 19.8% per year. Of course, few of us invested in this amazing company way back in 1965.
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So what would you have now if you’d invested $10,000 in Berkshire Hathaway just 10 years ago? Well, the answer might surprise you: You’d have $31,797 — which is 12.26% annually, on average. If you’re disappointed, know that you’d still be ahead of the S&P 500 — which averaged 11.61% over the same period.
Berkshire is simply growing more slowly in recent years, in part because it has grown so big. Its market value was recently $950 billion. Buffett is sitting on some $277 billion in cash, much of which he can deploy by buying more businesses, but he’s picky, insisting on high quality and a reasonable valuation.
Should you invest in Berkshire Hathaway now? Well, don’t do so if you’re looking for annual gains in the 20% range year after year. The stock is up about 23% year to date as of this writing, but its three-year average is 15%, and it may average only 8% or 10% over the next few years. No one knows.
But if you’re looking for a solid investment that’s very likely to grow over time, do consider the stock. Berkshire is a big conglomerate, with a wide range of businesses — including insurance, energy, homebuilding, jewelry, candy, transportation, and much more. And it owns a lot of stock in other companies — recently 21% of American Express, 9% of Coca-Cola, 2.5% of Apple, and nearly 12% of Bank of America.
American Express is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Selena Maranjian has positions in American Express, Apple, Bank of America, and Berkshire Hathaway. The Motley Fool has positions in and recommends Apple, Bank of America, and Berkshire Hathaway. The Motley Fool has a disclosure policy.
