A return of 5 million percent

The North Star of the investment world is starting to fade.

Warren Buffett handed over the CEO reins to Greg Abel after six decades of activity that transformed a mundane textile company into one of the most powerful composition engines in market history, leaving investors grappling with the singularity of that achievement, even as he remains chairman of Berkshire Hathaway.

When Buffett took control of Berkshire in the mid-1960s, its shares were trading around $19. By the end of 2025, a single Class A share was worth more than $750,000.

From 1964 – the year before Buffett took control of Berkshire – through 2024, the one-of-a-kind conglomerate achieved a compound annual gain of 19.9%, nearly double the S&P500stands at 10.4 percent, which translates to an overall return of more than 5.5 million percent, according to the company’s latest annual report. Stocks added another 10% to that return in 2025.

The record was built on an unusually frugal formula: using the insurance fund as a low-cost source of capital, buying businesses with sustainable cash flows and allowing time to do most of the work. This approach has resulted in long-standing holdings in companies such as Coca-Cola And American Expresswhile Berkshire expanded into railroads, utilities, and manufacturing through wholly owned subsidiaries.

“If it were that easy to do again, someone would do it,” said Bill Stone, chief investment officer at Glenview Trust Company and a Berkshire shareholder. “You think of the duo who Charlie Munger as a partner, it’s just hard to imagine that we could come together again anytime soon.”

As Buffett leaves the helm, investors are increasingly focused on what is disappearing with him. Seth Klarman, founder of the Baupost Group, called Buffett “a role model of America” ​​and said his retirement represented more than a leadership transition.

“The world of investing will be different without Warren Buffett at the helm of Berkshire,” Klarman said in a statement. tribute.

“Be silent”

Buffett said he “shuts up” as he steps back, signaling a reduced public presence even as he remains president. Abel will assume responsible for Berkshire’s annual letters to shareholders, a tradition that Buffett started in 1965 and which has become essential reading on Wall Street for its clear lessons on markets, management and capital allocation. Buffett will, however, continue to write a Thanksgiving message.

The annual letters were one of the pillars of Buffett’s influence. The other was Berkshire Annual Meeting of Shareholders. Often dubbed “Woodstock for capitalists,” the gathering has drawn tens of thousands of investors to Omaha, Nebraska, each year for hours of impromptu questions and answers. The event solidified Buffett’s role not only as a manager of capital, but also as a steady public voice that investors trust to put market turmoil into perspective.

Buffett also rejected many Wall Street conventions. Berkshire has never split its shares, thereby discouraging speculation and cultivating a shareholder base oriented toward decades rather than quarters. The company refused to release earnings forecasts and gave operational managers significant autonomy, while capital allocation decisions remained centralized in Omaha.

“Warren, as chairman, will be an advisor to Greg, a cultural anchor and a true long-term thinker,” Ann Winblad, managing director of Hummer Winblad Venture Partners and a longtime Berkshire shareholder, said on CNBC. “The exchange”. “Will the company fundamentally change its strategies? No…The culture at Berkshire Hathaway, which I have invested in, of patient, long-term, prudent and decisive investing will likely remain.”

The company held a record $381.6 billion in cash at the end of September, underscoring both its financial firepower and Buffett’s caution in a richly valued market. Berkshire has also been a net seller of stocks for 12 straight quarters, a rare and sustained decline that reflects limited opportunities at its scale.

The attention of shareholders is now focused on a less settled part of the succession plan: the fate of its $300 billion stock portfolio. With no obvious successor with a comparable public equity track record, some analysts believe Berkshire may ultimately reduce its active stock selection, especially given the size and concentration of the portfolio.

Buffett has also repeatedly warned shareholders against confusing volatility with failure.

“Our stock price will move capriciously, sometimes falling by around 50%, as has happened three times in 60 years under current leadership,” he wrote. “Don’t despair; America will come back and so will Berkshire stock.”