According to a study from fund research firm Morningstar, Buffett has posted 20% annualized gains over the past 45 years. Morningstar says that no other fund has come close. Fidelity Magellan has posted a 16.3% return over the same period and Templeton Growth has a 13.4% return. The Wall Street Journal, analyzing the data writes, “Berkshire’s Class A shares have delivered returns of 22% a year since 1965, based on market price, though Mr. Buffett prefers to judge gains according to book value, which stand at 20.3%..”
The numbers are all the more extraordinary because so many investment firms, institutional funds, and mutual funds have tried to mimic the Buffett investment style. Also, because Berkshire is a public company, Buffett has to file his investments and changes in them every quarter.
The most important aspect to Buffett’s success is that he rarely “churns” his investments. He has held stocks in companies like The Washington Post and Coca-Cola for longer period, through recessions and recoveries and good earnings and bad earnings. His bets on management and industries that he believe outperform the general economy has worked.
And, like Babe Ruth or Wayne Gretzky, no one is likely to ever see his match again.
Douglas A. McIntyre
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