This is pretty incredible to think about. Below is a year-by-year listing of Berkshire Hathaway’s year-end closing prices for their Class A stock.
It’s pretty incredible to think that a $20.50 investment at the end of 1967 would have been worth $141,600 at the end of 2007. That’s an average annual rate of return of 24.73% over each of those forty years! Had you purchased just 100 shares (a $2,050 investment + brokerage fees) of Berkshire at the end of 1967, you would have had over $14.1 MILLION at the end of 2007. That’s a pretty nice retirement!
Sadly, those returns are history now. Recent history (the last 5 years in particular) shows that the returns, although not bad, were nothing like the returns of the past. Here’s a look at how Berkshire performed over the last 5, 10, 15, and 20 years:
I think it’s evident that Buffett is having a harder time finding places to put Berkshire’s money. I wouldn’t expect 24% annual rates of return in the future.