Almost everyone knows that Warren Buffett is one of the best investors ever. For almost 60 years he has increased the value of his company’s shares Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) with an average annual rate of 19.8%. The S&P500 index averaged 10.2% per year in the same period.
Let’s see what you would have today if you invested about $100 in Berkshire Hathaway in 1965, when Buffett took over the struggling textile company. At the time, one share cost about $19.
Buffett has long been averse to stock splits, but he did create a second class of shares – B shares, as opposed to the original A shares – with 30 Class B shares equal to one Class A share.
He then split those Class B shares 50 to 1 as part of his acquisition of the Burlington Northern Santa Fe (BNSF) railroad. So today, one Class A share is equivalent to 1,500 Class B shares, with the latter recently trading for around $460 each.
However, keep in mind that the Class A shares have never been split. So if you bought about $100 worth of stock in 1965, that would have been about five shares – a total of $95. These unsplit Class A shares recently traded for almost $700,000 each. (Yes, that’s the price for one share!) So if you still had your five shares, they would be worth almost $3.5 million! All from a single $95 investment some 59 years ago.
If you’re not a Berkshire Hathaway shareholder, you can still become one by buying up some Class B shares. If you do, you’ll become part owner of dozens of Berkshire-owned companies, such as the insurer GEICO, Benjamin Moore Paints and See’s Candies, and you’ll also get a stake in Berkshire’s stock portfolio, with large positions. at companies like Apple And American Express.
There’s a lot to like about Berkshire Hathaway, and the future is promising, even if the company isn’t growing as quickly as it used to.
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