5.5 million percent returns since 1964, over 140 times that of S&P 500! Why there will be no other investor like Warren Buffett
Buffett's remarkable investment achievements stand unmatched in financial history. His exceptional performance as an investor remains unparalleled, setting a benchmark that appears insurmountable for future generations.
Whilst many discuss how life experiences influence investment decisions, Buffett has demonstrated a unique ability to integrate investment principles into everyday existence.
Buffett, among the world’s richest individuals and most successful investors, assumed leadership of Berkshire Hathaway in 1965 whilst it operated as a textile manufacturing firm. He transformed the organisation into a diversified enterprise by acquiring undervalued companies and stocks.
Also Read | Warren Buffett to hand over reins to Greg Abel: Top 10 things to know about ‘Oracle of Omaha’s’ successor at Berkshire Hathaway
5,502,284% returns!
Buffett has always avoided complex financial instruments and aggressive corporate takeover methods, preferring instead to focus on sustained, long-term investment strategies.
His enduring achievement remains Berkshire Hathaway, the Nebraska-headquartered conglomerate that owns various businesses, including Duracell batteries, Geico insurance, paint manufacturers and diamond companies.
The organisation maintains strategically chosen shareholdings in prominent American corporations, including Coca-Cola and Chevron.
As reported by Forbes magazine's real-time wealth tracker on Saturday, Warren Buffett’s wealth stands at $168.2 billion, positioning him as the world's fifth wealthiest individual.
From 1964 to 2024, if one were to compare the performance of Berkshire with S&P 500 - the former has gained 5,502,284%! As mind-boggling as the number appears (it’s 5.5 million percent!) - it’s true! S&P 500 on the other hand has delivered 39,054%. This is as per data shared in Warren Buffett’s annual 2024 letter to shareholders in February this year.
During the 1950s, Buffett worked on Wall Street and established the Buffett Partnership, which later combined with Berkshire Hathaway in 1965.
As an enthusiastic reader of financial publications and other materials, Buffett focused on investments he considered undervalued, maintaining his positions until they became profitable.
He developed Berkshire into a diverse conglomerate recognised for investments in fundamental sectors including energy, banking, air travel and food. The portfolio includes stakes in Citigroup, Kroger, Apple and American Express.
He managed Berkshire alongside his long-term vice chairman Charlie Munger, who was six years older than him.
Also Read | Warren Buffet, world’s 5th richest person, has $169 billion net worth: Here’s a look at his investments
Warren Buffett’s Best Investments
Apple: Did you know that Buffett has consistently maintained his reluctance to invest in technology firms, citing his limited understanding of their valuation and long-term viability?
However, he made an exception in 2016 when he began acquiring Apple shares. His rationale for investing more than $31 billion was based on his perception of Apple as a consumer goods company that commanded exceptional customer loyalty. The investment proved highly profitable, with its value escalating to over $174 billion before Buffett initiated the sale of Berkshire Hathaway's holdings.
National Indemnity and National Fire & Marine: Acquired in 1967, these firms marked Buffett's initial ventures into insurance. The insurance float - premiums received before claims settlement - served as investment capital for numerous Berkshire ventures, significantly contributing to the organisation's expansion. The insurance segment has since expanded to encompass Geico, General Reinsurance and additional insurers. By the first quarter's end, the float reached $173 billion.
Strategic investments in American Express, Coca-Cola Co. and Bank of America were made during periods when these companies faced challenges due to controversies or market situations. These shareholdings have appreciated by more than $100 billion above their purchase price, excluding substantial dividend earnings accumulated over time.
Warren Buffett’s humble beginnings
- Born on August 30, 1930, in Omaha as the second of three children, Buffett developed an early interest in business after reading "One Thousand Ways to Make $1,000" during his boyhood.
- Buffett saw a challenging childhood. He went through a period of shoplifting and had to deal with his mother Leila's abusive behaviour, who would call his sister Doris "stupid."
- Although he considered discontinuing his education, his father, who worked as a businessman and served as a congressman, prevented him from doing so.
- He initially studied at the University of Pennsylvania before moving to the University of Nebraska, where he completed his business degree.
- Subsequently, he earned a Master's degree in economics from Columbia University in New York in 1951.
Despite his immense wealth, Buffett maintains a distinctly modest lifestyle, avoiding the extravagant pursuits typical of ultra-wealthy individuals, such as collecting expensive artwork or owning multiple luxurious properties globally.
His residence remains the same modest house in a peaceful Omaha suburb, purchased in 1958 for $31,500.
His daily dietary preferences are notably simple, consisting of McDonald's Chicken McNuggets thrice weekly, potato chips for snacking, ice cream as dessert, and approximately five cans of Coca-Cola daily.
For leisure, he enjoys playing bridge and strumming the ukulele.
In 2006, Buffett admitted to owning a private aircraft, stating it simplified his lifestyle. That same year, he pledged to give away 99 percent of his wealth to charitable causes.
Alongside his bridge companion Bill Gates, Buffett successfully encouraged other billionaires to commit to donating at least half their fortunes.
These philanthropic initiatives have earned Buffett widespread admiration in American society, attracting numerous small investors to Berkshire's annual spring gathering in Omaha, an event that's come to be known as a "Woodstock for capitalists."
As the world’s most famous and wise investor bows out of the role of Berkshire Hathaway, investors around the world would continue to make the most of his timeless investment mantras.
Warren Buffett famous quotes: Berkshire Hathaway CEO, and the world’s 5th richest person, has announced his intention to retire by the end of 2025. Warren Buffett and his investment mantras are a timeless textbook for all types of investors - new or old, big or small. The 94-year old Buffett’s life and investments are a learning for all and as he looks to hand over the reins to Greg Abel, we know his quotes will continue to stand the test of time. Here’s a look at some handpicked top 10 quotes from Warren Buffett for every investor:
Warren Buffett has always said: “Rule No. 1: Never Lose Money. Rule No. 2: Never Forget Rule No. 1.” It's one of his most famous quotes, that he reiterated time and again. (AI image for representative purpose only)
Warren Buffett: "I don’t invest to make a quick profit. I buy stocks with the mindset that the market might shut down tomorrow and stay closed for five years." (AP Photo)
Warren Buffett: “Price is what you pay. Value is what you get.” - that's yet another age old mantra from the veteran investor on price versus value that all investors should take note of.
Warren Buffett once said on making money: “If you don’t find a way to make money while you sleep, you will work until you die". (AI image for representative purpose only)
What is Warren Buffett's take on the stock market? He has in the past said that “The stock market is a device for transferring money from the impatient to the patient.”
Warren Buffett once famously spoke about greed and the guiding principle of investment that you shouldn't ignore: "Be fearful when others are greedy, and greedy when others are fearful," Buffett has said.
Warren Buffett has spoken about the importance of investing at fair price. He says, “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” (AP Photo)
Warren Buffett on the importance of the company that you keep: “It’s better to hang out with people better than you. Pick out associates whose behaviour is better than yours and you’ll drift in that direction."
Warren Buffett has a tip on stock picking, quality stocks and the timing of buying them. “Whether we're talking about socks or stocks, I like buying quality merchandise, when it is marked down.”
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