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Warren Buffett, the world’s most venerated and successful investor, is the first to admit that the mind-boggling wealth creation he has achieved with his investment vehicle Berkshire Hathaway over the years is due to the phenomenal growth of US companies iWhat’s wrong with fries and ketchup?
Warren Buffett, the world’s most venerated and successful investor, is the first to admit that the mind-boggling wealth creation he has achieved with his investment vehicle Berkshire Hathaway over the years is due to the phenomenal growth of US companies in the last 50 years and the economic prosperity of the US after World War II. What he does not say is that he and a small team of colleagues, since putting up shop more than 50 years ago, have outwitted the performance of American stocks by 2.5 million per cent – a triumph of stock picking over index investing, one could argue. Since June 1990 the Standard & Poor’s index of the biggest US corporations has gained more than 300 per cent in value. Berkshire’s share price has multiplied in the same period from $7,100 to $304,115 at the time of writing, a gain of 4,183.31 per cent. Throughout the years Buffet has invested in businesses he “understood”, as he never grows tired of emphasising: everything from financials to Coca Cola to railways. He was therefore late to invest in the new economy. Amazon and Apple were very recent investments, not so much driven by the wish to unearth hidden value but by the need to handle an... Read more
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