5 million percent return

The investment world’s North Star is beginning to dim.

After 60 years of running a mediocre textile company into one of the most powerful compounding engines in market history, Warren Buffett has handed over the CEO reins to Greg Abel, who remains chairman, leaving investors wondering just how unique his accomplishments actually were. Berkshire Hathaway.

When Buffett took control of Berkshire in the mid-1960s, Berkshire stock was trading around $19. By the end of 2025, each Class A share will be worth more than $750,000.

From 1964, the year before Buffett took control of Berkshire, to 2024, this unique conglomerate delivered a compound annual return of 19.9%. That’s almost twice as much as Mr. Buffett. S&P500According to the company’s latest annual report, its return was 10.4%, and overall profit was more than 5.5 million percent. In 2025, stocks will add another 10% to that return.

This record was built on an unusually generous formula: using insurance float as a low-cost source of capital, acquiring companies with durable cash flows, and taking time to do most of the work. This approach has created long-term holdings in companies such as: coca cola and american expressMeanwhile, Berkshire expanded into railroads, utilities, and manufacturing through wholly owned subsidiaries.

“If it were that easy to start over, someone would be doing it,” said Bill Stone, chief investment officer at Glenview Trust Company and a Berkshire shareholder. “When you think about the duo having Charlie Munger as their partner, it’s hard to imagine them getting back together again anytime soon.”

As Buffett relinquishes control, investors are increasingly focused on what will disappear with him. Baupost Group founder Seth Claman called Buffett “a role model for America” ​​and said his retirement is more than just a change of leadership.

“The world of investing would be different without Warren Buffett at the helm of Berkshire,” Claman said in his eulogy.

“Be quiet”

Buffett said he would be “quiet” when he retired, suggesting that his public presence is declining even as he remains chairman. Mr. Abel will be responsible for Berkshire’s annual shareholder letter, a tradition started by Mr. Buffett in 1965 that has become required reading on Wall Street for its candid lessons on markets, management and capital allocation. But Buffett will continue to write Thanksgiving messages.

The annual letter was one pillar of Buffett’s influence. The other was Berkshire’s annual shareholder meeting. The gathering, also known as “Woodstock for Capitalists,” draws tens of thousands of investors to Omaha, Nebraska, each year and features hours of unscripted questions and answers. The event reinforced Buffett’s role not only as a custodian of capital but also as a stable public voice trusted by investors to keep market turbulence in perspective.

Buffett also rejected many of Wall Street’s conventions. Berkshire didn’t split its stock, curbed speculation, and cultivated a shareholder base that focused on decades rather than quarters. The company declined to release earnings guidance and gave its operating managers broad discretion while capital allocation decisions remained centralized in Omaha.

“As chairman, Warren will be an advisor to Greg, who is a cultural anchor and a true long-term thinker,” Anne Winblad, managing director of Hammer Winblad Venture Partners and a longtime Berkshire shareholder, told CNBC’s “The Exchange.” “Will the company’s strategy fundamentally change? No. …The Berkshire Hathaway culture that I’ve invested in, which is patient, long-term, prudent and decisive investing, will probably still be there.”

The company held a record $381.6 billion in cash at the end of September, highlighting both the company’s financial strength and Buffett’s cautious approach. Berkshire has also been a net seller of the stock for 12 consecutive quarters, a rare sustained setback that reflects the limited opportunities at the company’s size.

Shareholder attention has shifted to the unresolved part of the succession plan: the fate of the company’s $300 billion stock portfolio. Without a clear successor with a comparable track record in public stocks, some analysts say Berkshire may eventually scale back on its aggressive stock picking, especially given the size and concentration of its portfolio.

Buffett has also repeatedly warned shareholders not to mistake volatility for failure.

“Our stock price has been volatile, sometimes dropping by as much as 50%, which has happened three times in 60 years under current management,” he said. “Don’t despair. America will come back, and so will Berkshire.”