Warren E. Buffett’s letters to shareholders, part of Berkshire Hathaway’s annual reports since 1965, are regarded as a source of wisdom for future investors.
Unfortunately, there will be no more “Letter to Shareholders” authored by Warren Buffett.
However, do not despair. Warren Buffett will continue to write the annual “Thanksgiving Message”. And the latest of these was just released.
Buffett is stepping down as the CEO and is being replaced by Greg Abel next year. Abel, 63, is the vice chairman of non-insurance operations of Berkshire and was designated as Buffett’s successor in 2021.
A look at Berkshire Hathaway’s conglomerate reveals its great dominance over the other companies in the S&P 500 index.
Berkshire Hathaway Inc. Class A share trades at a whopping $744,481, while Class B share trades around $496.60.
Since 1965, shares of Warren Buffett’s conglomerate, Berkshire Hathaway, have delivered a compounded annual return of 19.9%, almost double that of the S&P 500 over the same period. Berkshire Hathaway reported a strong earnings report recently, revealing a cash position of over $380 billion.
But Berkshire Hathaway’s stock price has not always shown a linear rise. In Buffet’s Thanksgiving letter to shareholders, he writes, “Our stock price will move capriciously, occasionally falling 50% or so as has happened three times in 60 years under present management. Don’t despair; America will come back, and so will Berkshire shares.”
Since the news of stepping down as CEO became public, Warren Buffett’s Berkshire Hathaway has underperformed the S&P 500 index. The S&P 500 is up over 16% YTD while Warren Buffett’s Berkshire Hathaway has gained 10% so far this year.
