Berkshire Hathaway (BRK.A -1.10%) (BRK.B -0.83%) has been one of the most successful long-term investments of all time, producing returns in excess of 5,500,000% since Warren Buffett took control in the 1960s.
However, Buffett himself cautioned in his 2014 letter to shareholders -- marking his 50th anniversary of leading Berkshire -- that the returns of the next 50 years wouldn't come close to those of the first 50 under Buffett's leadership. The numbers have simply become too big for the investment to 100X, or even to 10X, from current levels in the not-too-distant future.
Image source: The Motley Fool.
With that in mind, now that Berkshire is a member of the trillion-dollar market cap club, how are its returns?
$10,000 invested in Berkshire five years ago
I won't keep you in suspense. A $10,000 investment in Berkshire Hathaway five years ago would be worth about $22,300 today. That's a 123% total return, or a little more than 17% annualized.
It's also important to note that the S&P 500 (^GSPC 0.34%) produced a total return of 110%, or about 16% annualized, over the same period. And not only did Berkshire beat the market, but it did so with a beta of 0.77, indicating significantly lower volatility than the overall market.
This is exactly what Buffett had hoped would happen when he wrote his 50th anniversary letter -- a performance that marginally beats the market over time, and without too much of a roller-coaster ride.
