Did you know that Warren Buffett earns thousands of dollars in dividends per minute? Or that lunch with the Oracle of Omaha is apparently worth millions? These are just a couple of interesting facts about Berkshire Hathaway's (NYSE:BRK-A) (NYSE:BRK-B) legendary CEO that you may not be aware of.
1. Warren Buffett almost sold all of his Berkshire shares for $11.50 in 1964
When Warren Buffett originally bought shares in a struggling textile manufacturer named Berkshire Hathaway in 1962, he was simply trying to make a quick profit, not take over the company and grow it in to a conglomerate.
In 1964, Berkshire offered to buy back Buffett's shares for $11.50, which would result in a gain of more than 50%, and Buffett accepted. However, when Buffett received a written offer, it was for $11.375 per share, which would still result in a strong gain.
Buffett became so infuriated that not only did he refuse to sell, but he bought enough Berkshire stock to take control of the company (and fire the manager who refused to honor the original agreement). Berkshire's shares are worth approximately $275,000 each as I write this. Surprisingly, Buffett has referred to his takeover of Berkshire as the worst investment he's ever made.
2. Buffett invests in a personal portfolio as well as through Berkshire
The vast majority (about 99%) of Buffett's wealth is in Berkshire Hathaway stock, and generally when you read about "Buffett stocks," you're actually reading about stocks Buffett or his team have purchased for Berkshire Hathaway's portfolio.
However, Buffett does maintain a personal stock portfolio that's worth a significant amount of money. He rarely discusses investments in his personal portfolio, but we do know a few. Major Berkshire holding Wells Fargo is also one of Buffett's personal holdings, as is real estate investment trust Seritage Growth Properties. Buffett has said that the stocks he holds are similar in nature to what he would buy for Berkshire, but he holds some that wouldn't make the cut based on size -- Seritage is a good example of this.
3. People have paid millions for lunch with Buffett
Warren Buffett has donated more than $30 billion to charitable organizations over the years, and is planning to give away substantially all of his remaining wealth.
As part of his philanthropy, Buffett auctions off a lunch with himself every year to benefit anti-poverty charity GLIDE. The auctions, which were an idea of Buffett's late wife Susie in 2000, give the winner a lunch for themselves and up to seven friends with Buffett at the Smith & Wollensky steakhouse in New York City.
The bids regularly extend into the millions. The 2017 winner paid $2.68 million for the lunch, and 2016's winner paid $3.4 million. In all, the auctions have generated over $26 million for the foundation.
4. Buffett stocks pay more than $6,700 in dividend income per minute
During the second quarter of 2017, Berkshire Hathaway's stock portfolio generated about $882,000,000 in dividend income, which translates to about $6,731 in dividend income per minute.
Much of this amount came from Berkshire's largest stock holdings, including $148 million from Coca-Cola, $182 million from Wells Fargo, and more than $195 million from Kraft Heinz.
Buffett loves dividend stocks, especially those that consistently raise their payouts, as they generate a reliable stream of cash that Berkshire can put to work in any way management sees fit.
5. Buffett regularly does poorly during great years for the stock market
You might be surprised to learn that Berkshire regularly underperforms the markets in years when the stock market is soaring. For example, when the S&P 500 jumped by 29% in 2003, Berkshire's stock rose by less than 16%. When the S&P rebounded nearly 27% from the financial crisis in 2009, Berkshire gained less than 3%.
Buffett openly acknowledges that Berkshire will often fail to beat the market during its best years. However, Berkshire's long-term success is due to beating the market when times are tough.
Consider this impressive statistic. Since 1965, the S&P has finished the year with negative total returns 11 times. In these 11 years, Berkshire outperformed the S&P nine times, often by impressive margins. In 2000, as the dot-com bubble started to burst, the S&P 500's total return was -9.1%. On the other hand, Berkshire gained nearly 27% that year. The company also beat the falling market in 2001 and 2002.
In investing, a smart defensive strategy can generate far superior gains to an aggressive one, and Berkshire's track record is proof of this. In fact, while the S&P 500 generated total returns of 12,717% from 1964 through 2016, Berkshire returned a staggering 1,972,595%, despite underperforming the market several years along the way.