The era of the "Oracle of Omaha" as the day-to-day captain has officially come to a close. Warren Buffett, the legendary investor, stepped down as the Chief Executive Officer of Berkshire Hathaway on December 31, concluding a remarkable six-decade-long reign that transformed a struggling textile mill into a global conglomerate.
The Unmatched Berkshire Hathaway Journey Under Buffett
Buffett, who is 95 this year, began his association with Berkshire in 1962, initially purchasing shares of the then-struggling New England textile manufacturer for $7.60 per share. By 1965, he had assumed full control. Analysts estimate the implied share price at that takeover was between $15 and $18. Fast forward to today, and a single Class A share of Berkshire Hathaway commands a staggering price of over $755,400.
This astronomical rise translates into a mind-boggling return of approximately 47,21,150% over the period of his leadership. Even after donating more than $60 billion to philanthropy in the last two decades, Buffett's personal fortune from Berkshire stock remains valued at roughly $150 billion.
Berkshire's Performance: Beating the Market Benchmark
A key measure of Buffett's investing prowess is how Berkshire Hathaway performed against the broader market. The company's 2024 annual report highlights that from 1965 to 2024, Berkshire achieved a compounded annual gain of 19.9%. This nearly doubles the 10.4% annual gain of the S&P 500 index over the same epic timeframe.
This outperformance was fueled by Buffett's famous long-term bets on companies like American Express, Coca-Cola, and Apple. However, the report also notes that Berkshire's massive size has recently created hurdles in maintaining its historic growth pace. Interestingly, 2024 saw the S&P 500, with a 17% rise, likely to outpace Berkshire's 12% gain for the year.
The Future: All Eyes on Successor Greg Abel
With Buffett's retirement, the investment world's focus shifts squarely to his successor, Greg Abel. The world first learned Abel was the chosen heir in 2021, when Buffett's late partner, Charlie Munger, confirmed it during an annual meeting, expressing confidence that Abel would preserve the company's unique culture.
Investors and market watchers will now keenly observe how Abel steers the Berkshire ship, navigating the challenges of its enormous scale while adhering to the value-investing principles that built its legacy.
Disclaimer: This story is for educational purposes only. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
