News In Brief

Warren Buffett’s annual letter to Berkshire Hathaway shareholders is a must-read

Jaclyn Giovis Feb 28, 2011
News In Brief

Warren Buffett’s annual letter to Berkshire Hathaway shareholders is a must-read

Jaclyn Giovis Feb 28, 2011

Warren Buffett has a knack for beating the market. So his annual letter to shareholders, which he released this weekend, is required reading for savvy investors.

The letter starts with a revealing table showing that since 1965, Berkshire Hathaway Inc.’s corporate portfolio has outperformed the S&P 500 Index in all but eight years. Buffett’s holding company has seen its book value grow at a compounded annual rate of 20.2 percent from 1965 to 2010, according to the company’s annual letter to shareholders. During the same 46-year span, the S&P scored a compounded annual gain of 9.4 percent.

Overall, a Berkshire share would have appreciated an astounding 490,409 percent during Buffett’s tenure. The S&P’s return during the same period: 6,262 percent.

Berkshire’s portfolio value has declined only twice annually since 1965 – in 2001, as a result of the tech bubble bursting, and following the stock market crash in 2008. During the same period, the S&P index suffered 11 annual declines.

All of this to say: It’s no wonder why America is fascinated with Warren Buffett.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.