To give you an idea of the scope of the company’s operations, the gain in net worth for the fiscal year was $12.3 billion, or 11% year-over-year. He’s compounded that figure at 21.1% for 43 years. Despite some dismal results in some segments such as housing, furnishings, construction, and real estate brokerage, Buffett points out that these problems are “minor and temporary”, giving much hope to long-term investors.
In fact, this year there is a discussion of how the total return on capital, combined with the presence (or absence) of durable competitive advantages, can have an enormous influence on the total wealth created for owners. Whether you are a small business owner, passive investor, or budding financier, it’s probably worth your time to study the math and reflect on his points.
In the interest of full disclosure, I should point out that roughly half of my net worth is currently, and has been for some time, invested in Berkshire Hathaway. It’s a business about which I am passionate, run by a group of extraordinary men and women. If the culture remains in place, it’s a stock that I currently hope to continue adding to my portfolio long after both Charlie Munger and Warren Buffett have passed from this world.
