Buffett's Berkshire Hathaway: Consistent Outperformance

On the weekend, legendary investor Warren Buffett announced that he would be stepping down as CEO of Berkshire Hathaway at the end of the year. After decades at the helm of the world’s most successful holding company, Buffett is handing the reigns to Greg Abel, his longtime designated successor. “At 94, it won’t be long before Greg Abel replaces me as CEO and will be writing the annual letters,” Buffett wrote in its letter to shareholders in February 2025, perhaps already knowing that the time to step aside had come.

As chairman and CEO of Berkshire Hathaway, Buffett built a fortune through disciplined value investing, favoring fundamentally strong companies with long-term growth potential. Over his decade-long career, Buffett became a symbol of patient, rational investing and an often-quoted source of financial wisdom. “Be fearful when others are greedy and greedy when others are fearful,” was one of his famous mantras, which guided many private investors throughout the past decades.

Buffett, the “Oracle of Omaha”, wouldn’t have become this cult figure in financial circles if he didn’t have the numbers to back up his wisdoms. Since 1965, Berkshire Hathaway’s stock outperformed the S&P 500, including dividends, in 40 out of 60 years, returning a total of 5,502,284 percent compared to the S&P 500’s total return of 39,054 percent. Berkshire’s compounded annual gain over that period was 19.9 percent, almost double the S&P 500’s 10.4 percent annual return. $1,000 invested at the end of 1964 would have been worth $55 million at the end of 2024, illustrating the power of compound interest, one of Buffett’s guiding principles.

Buffett’s legacy includes not just immense wealth, but also philanthropy, having pledged to give away 99 percent of his fortune during his lifetime or at death. “This pledge will leave my lifestyle untouched and that of my children as well,” he wrote in 2010, contrasting his contribution to the sacrifices made by regular Americans who give away money they could use for personal pleasure instead. It is this self-awareness and sense of reality that has made Buffett so popular, especially in an age when other billionaires strive for ever more power.