Warren Buffett's Berkshire Compounded at 19.7% a Year Between 1965 and 2025, Nearly Double the S&P 500's 10.5% Annual Return. Can Investors Still Apply That Playbook Today?

Warren Buffett is universally regarded as one of the greatest investors of all time. The former Berkshire Hathaway (BRKA +0.70%) (BRKB +0.88%) CEO is heralded for his folksy quotes and investment wisdom, but when you get right down to the numbers, they show his sustained greatness.

He retired as CEO at the end of 2025, and for the previous 60 years at the helm of Berkshire Hathaway, his portfolio averaged a ridiculous 19.7% compounded annual gain. A 20% average annual return is great for five years or 10 years, but 50 years? That’s just elite.

Over the same 60-year period, the S&P 500 has had a compound annual return of roughly half that — 10.5%. And the Nasdaq Composite, which hasn’t even been around that long, launching in 1971, has an 11.8% compound annual return since 1971.

That’s a tough act to follow, which Buffett’s successor, Greg Abel, acknowledged in the 2025 annual report, calling Buffett “arguably the greatest investor of all time.”

Abel hands

Berkshire Hathaway has arguably been the most reliable stock to own throughout the Buffett era. Investors grew to trust Buffett, and that trust was rewarded year after year with stellar returns.

Should investors expect the same type of performance from the company over the next 60 years? No, they probably shouldn’t. That’s a ridiculously high bar to expect the stock to clear over the long term. But that doesn’t mean you shouldn’t invest in Berkshire Hathaway stock. In fact, it remains one of my favorite stocks.

Abel and company don’t need to average 20% returns each year over the next 20, 40 or 60 years to be an attractive buy. They do need to outperform the S&P 500 over time, which I’m confident they will. That’s because the company that Buffett set up is built for long-term success.

From the companies it owns to the stocks in its portfolio, Berkshire Hathaway is invested in properties that are designed for long-term performance. They are well-run, efficient market leaders in essential, diverse industries. They are also great values. This creates a portfolio built to navigate various market cycles.

And that makes Berkshire Hathaway a stock that typically shows its strength during downturns, outperforming the market whether it is up or down.

Framework intact

Abel has already left his mark on the portfolio, making several key changes. He also has a huge cash pile to steer the portfolio where it needs to go. Investors should trust that Abel will continue the stewardship of Berkshire Hathaway, as he has been steeped in its culture and has learned from Buffett since he arrived in the early 1990s. As Abel wrote in the shareholder letter:

Berkshire’s culture and values form the basis of our operating framework, which shapes the strategy we pursue and the choices we make as we build Berkshire. As CEO, the framework governs how I lead every day. Our owners’ time horizon extends beyond the tenure of any individual CEO. I will not be your CEO for the next 60 years as simple arithmetic makes that — shall we say — an ambitious plan. However, 20 years from now, when I will have just a fraction of the tenure that Warren had, my intention is that you — or your descendants — will be proud that your company is even stronger.

The portfolio may shift and the returns might not be quite as high, but Berkshire Hathaway should remain a must-own stock for a long time.