Here’s How Much You’d Have Now If You Invested $1,000 in Warren Buffett’s Berkshire Hathaway 10 Years Ago
Warren Buffett, the CEO of Berkshire Hathaway, is considered by many to be the world’s best investor. Buffett turned Berkshire Hathaway from a struggling textile company into a massive holding company that has made its investors rich over the years. Many of those who got into the stock early enough are now multimillionaires or even billionaires.
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Buffett took over Berkshire Hathaway in 1965 with many early acquisitions and investments in insurance companies like National Indemnity and GEICO, using the “float” — premiums paid by customers that haven’t yet been paid out in claims — to fuel additional investments. Today, Berkshire fully owns dozens of businesses, some obscure, some household names, like Duracell, Fruit of the Loom, Benjamin Moore and See’s Candy.
What Would $1,000 Be Worth Today?
So, just how much would you have today if you had invested $1,000 in Berkshire Hathaway stock 10 years ago?
Berkshire Hathaway has two classes of stock, A stock and B stock. Buffett famously refused to do stock splits, feeling that keeping the price high encouraged long-term investors, even as the price of a share of A stock grew to incredible heights. The company eventually relented — sort of. They issued B stock which carries a much lower price and has lower voting rights than A stock.
A single share of A stock traded for around $190,000 ten years ago, putting it well out of reach of our $1,000 budget, so you would have had to invest in the B shares. In April of 2014 those shares traded between $121.09 and $129.20 — for simplicity’s sake, let’s split the difference and call it an average cost of $125 a share. That works out to exactly 8 shares.
B shares closed today, the 24th of April, at $405.95 a share, meaning your 8 shares would be worth $3,247.60 – that’s about a 225% total return, or about 12.5% annualized. That sounds pretty good, and it is. Berkshire beat the market over a ten year period.
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That same $1,000 passively invested in the S&P 500 over the same period would be worth $2,738.82 today, about a 173% total return.
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