Warren Buffett leads Berkshire Hathaway to new heights at age 94

Warren Buffett turns 94 on Friday, and his unique, colossal conglomerate has never been more valuable.

Berkshire Hathaway become the first non-tech company reached a market capitalization of $1 trillion This week, Berkshire’s Class A shares also hit a price above $700,000 a share for the first time.

Howard Marks, a great investor and friend of Buffett’s, pointed out three things that helped the “Oracle of Omaha” take Berkshire to new heights, even in his old age.

“It’s a matter of a carefully thought-out strategy executed over seven decades with discipline, consistency and extraordinary insight,” said Marks, co-founder and co-chairman of Oaktree Capital Management. “Discipline and consistency are necessary, but not sufficient. Without extraordinary insight, he clearly would not be the greatest investor in history.”

“His track record is a testament to the power of compounding at very high rates over very long periods of time, without interruption. He never took a vacation,” Marks added.

Between The Go-Go Stock Market of the 1960sBuffett used an investment partnership he ran to buy a failing New England textile company called Berkshire Hathaway. Today, his company is unrecognizable from what it once was, with businesses ranging from GEICO insurance to BNSF Railway, a $300 billion equity portfolio, and a massive $277 billion cash fortress.

Generations of investors who have studied and imitated Buffett’s investing style have marveled at his wise moves over the decades. Coca Cola Bets from the late 1980s provided a lesson in the value of patient investment in strong brands with wide moats. Injecting a lifeline investment into Goldman Sachs The depths of the financial crisis have shown an opportunity in crises. Go all in. Apple In recent years he has spoken of his flexibility in applying his values ​​approach to new times.

Buffett made headlines earlier this month when he revealed He sold half of his Apple shares.ring a little bell about an extremely lucrative deal. (While Apple is widely considered a growth stock, Buffett has long argued that every investment is a value investment—“You’re putting some money down now to make more later.”)

Decades of good returns have followed, and he has achieved an unparalleled record. Berkshire shares have generated an annualized return of 19.8% from 1965 to 2023, nearly double the S&P 500’s 10.2% return. Overall, the stock has risen 4,384,748% since Buffett took over, compared with a 31,223% return for the S&P 500.

“He’s the most patient investor ever, which is a big reason for his success,” said Steve Check, founder of Check Capital Management, of which Berkshire is the largest holding. “He can sit, sit, sit. Even at an age where he doesn’t have much time left to sit, he’ll sit until he feels comfortable. I just think he’ll continue to do the best he can until the very end.”

Buffett remains chairman and CEO of Berkshire, although Greg Abel, Berkshire’s vice chairman of non-insurance operations and Buffett’s designated successor, has taken on many responsibilities at the conglomerate. Earlier this year, Buffett said Abel, 62, will make all investment decisions upon his death.

Buffett and Marks

Oaktree’s Marks says Buffett has reinforced concepts that are integral to his own approach. Like Buffett, he is indifferent to macro forecasting and market timing; he relentlessly seeks value, while remaining within his own circle of competence.

“He doesn’t care about timing the market and trading, but when other people panic, he steps in. We try to do the same thing,” Marks said.

Buffett, who studied at Columbia University under Benjamin Grahamadvised investors to view their stock holdings as small pieces of a business. He believed that volatility was a big plus for the real investor because it provided an opportunity to take advantage of emotional selling.

Oaktree, with $193 billion in assets under management, has grown into one of the world’s largest alternative investment firms, specializing in distressed lending and bargain hunting.

Marks, 78, has become a sharp, articulate dissenting voice in the investment world. His popular investment memos, which he began writing in 1990, are now considered required reading on Wall Street and have even received a glowing endorsement from Buffett himself — “When I see a Howard Marks memo in my mail, it’s the first thing I open and read. I always learn something.”

The two were introduced after Enron’s bankruptcy in the early 2000s. Marks revealed that Buffett eventually pushed him to write his own book — Most importantly: Extraordinary insight for the thoughtful investor — a decade ahead of his own schedule.

“He was so generous with his comments. I don’t think the book would have been written without his inspiration,” Marks said. “I had planned to write a book when I retired. But with his encouragement, it was published 13 years ago.”

Buffett’s trajectory and ability to enjoy what he does even into his 90s also impressed Marks.

“He said he quit his job in the morning. He approached investing with enthusiasm and joy,” Marks said. “I’m not retired yet, and I hope I never retire, following his example.”