Skip to main content

A couple of days ago I posited that the reason Warren Buffett is the most respected CEO in the world is that he never passes the buck. I guess his impressive track record might also have something to do with it:

Many investors can only look on with envy when Warren Buffett says his investors have seen 20% annualized gains over the past 45 years—even the best mutual funds pale by comparison.

Only two funds are even on the horizon: Fidelity Magellan Fund, which has returned 16.3% a year during Mr. Buffett’s chairmanship of Berkshire Hathaway Inc., and Templeton Growth Fund, up 13.4% a year on average, according to investment researcher Morningstar Inc.

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%.

Using Berkshire’s market-price gains for fairer comparison with mutual funds, $10,000 invested with Mr. Buffett on Oct. 1 1964—equivalent to about $60,000 in today’s dollars—would now be worth about $80 million. The same amount in Fidelity’s fund would have grown to about $9.1 million, while Templeton Growth investors would now have roughly $2.9 million.

The returns covered the 45 years through the end of 2009. During that period the Standard & Poor’s 500 was up 9.3% on an annualized basis—$10,000 would have grown to nearly $560,000. There were 145 mutual funds at the start of 1965.

Leave a Reply