A 5 million percent return

The north star of the investment world is starting to fade.

Warren Buffett has handed over the CEO reins to Greg Abel after a six-decade run that turned an unremarkable textile company into one of the most powerful compounding engines in market history, and even though he remains chairman of the board, investors are grappling with just how unique that success really is. Berkshire Hathaway.

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

From 1964, the year before Buffett took control of Berkshire, to 2024, the one-of-a-kind conglomerate generated compound annual returns of 19.9%; S&P 500According to the company’s last annual report, this rate was 10.4%, resulting in a total return of more than 5.5 million percent. Shares add another 10% to that return in 2025.

The record was built on an unusually spare formula: Use the insurance float as a low-cost source of capital, buy businesses with durable cash flows, and take the time to do most of the work. This approach has led to long-held shares in companies such as: Coca Cola And American ExpressBerkshire, meanwhile, has expanded into railroads, utilities and manufacturing through wholly owned subsidiaries.

“If it were that easy to do it again, someone would be doing it,” said Bill Stone, chief investment officer of Glenview Trust Company and a Berkshire shareholder. “When you think about the duo with your partner, Charlie Munger, you find it hard to imagine them getting back together anytime soon.”

As Buffett leaves the helm, investors are increasingly focusing on what disappears with him. Baupost Group founder Seth Klarman called Buffett “an American role model” and said his retirement represents more than a leadership transition.

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

‘I’m Going Quietly’

Buffett said he would “remain quiet” in stepping back, signaling that his public presence is diminishing even if he remains president. Abel will assume responsibility for Berkshire’s annual shareholder letters; It’s a tradition that Buffett started in 1965 and has become essential reading on Wall Street for its forthright lessons on markets, management and capital allocation. But Buffett will continue writing Thanksgiving messages.

Annual letters were a pillar of Buffett’s influence. The other was Berkshire’s annual shareholders meeting. Often referred to as “Woodstock for Capitalists,” the convention draws tens of thousands of investors to Omaha, Nebraska, each year for hours of unscripted questions and answers. The event reinforced Buffett’s role not only as a guardian of capital but also as a steady public voice that investors rely on to put market turmoil into perspective.

Buffett also rejected many Wall Street contracts. Berkshire has never split its shares, discouraging speculation and creating a shareholder base focused on decades rather than quarters. The company refused to issue earnings guidance and gave broad autonomy to business managers, while capital allocation decisions remained centralized in Omaha.

“Warren will be an advisor to Greg as chairman, a cultural pillar and a true long-term thinker,” Ann Winblad, managing director of Hummer Winblad Venture Partners and longtime Berkshire shareholder, said on CNBC’s “The Exchange.” “Will the company fundamentally change its strategies? No. ..The patient, long-term, careful and determined investment culture of Berkshire Hathaway, where I invest, will likely continue.”

The company had a record $381.6 billion in cash at the end of September; This underscored both his financial firepower and Buffett’s caution in a highly valuable market. Berkshire has also been a net seller of stock for 12 consecutive quarters; it is a rare and persistent decline that reflects limited opportunities at its scale.

Shareholders’ attention is shifting to a less established part of the succession plan: the fate of the $300 billion equity portfolio. With no obvious successor with a similar track record in public stocks, some analysts say Berkshire may eventually reduce its active stock selection, especially given the size and concentration of the portfolio.

Buffett has also repeatedly warned shareholders not to confuse volatility with failure.

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