Berkshire Hathaway stock could crash 99 percent and would still have outperformed the S&P 500
If Berkshire Hathaway stock fell 99 percent, Buffett would still have outperformed the S&P 500. Berkshire’s stock has increased by 3,800,000% between 1965 and 2022, a period when the S&P 500 increased by 25,000%. Buffett’s company exceeded $1 trillion of assets last quarter, and the stock is trading at a record price.
Warren Buffett’s Berkshire Hathaway could suffer a 99 percent crash in its stock price, and it would still have toppled the S&P 500 over a nearly 60-year period.
“Berkshire can lose 99.4 percent and has still outperformed the S&P 500 since “current management” bought control in 1965,” Chris Bloomstran said in a recent post on X. Bloomstran is CEO of Semper Augustus Investments, a longtime Berkshire shareholder that counts the company as its primary holding.
In fact, Berkshire’s stock price skyrocketed by nearly 3,800,000 percent between 1965 and the end of 2022 – a gain more than 100 times greater than the S&P 500’s roughly 25,000 percent rise over the same period.
Berkshire’s Class A shares have climbed another 17 percent this year to trade at a near-record $550,000, almost matching the S&P 500’s year-to-date gain. As a result, the performance gap between the stock and the index has widened to well over 4,000,000%.
Bloomstran highlighted another striking fact about Berkshire’s progress with Buffett at the helm. But how about this fun statistic: Mr. Buffett PAID under $11 per share for his position in BRK” he wrote. “Today the company earns $11 per share. Every 2.25 hours!”
The statistics underline the enormous scale of Berkshire today. The sprawling conglomerate owns numerous companies, including Geico, Duracell and Dairy Queen, and multi-billion dollar stakes in Apple, Coca-Cola and other public companies.
Buffett’s company generated over $300 billion in revenue and $30 billion in operating income last year. It exceeded $1 trillion of assets at the end of the second quarter, a figure that included nearly $150 billion in cash and Treasury bills and its equity portfolio of about $350 billion.
In his letter to shareholders this year, Buffett attributed Berkshire’s spectacular profits to some really big investments, such as the purchase of Coca-Cola and American Express shares more than 25 years ago. He also stressed that he expects much more success in the future.
“Over time, it only takes a few winners to do wonders,” he said. “In Berkshire, there will be no finish line.”
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