You’re probably at least somewhat familiar with Warren Buffett, CEO of Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B). That’s likely due to his amazing long-term investing record. Consider, for example, that according to his 2024 letter to shareholders, his company has averaged annual gains of 19.9% between 1965 and 2024 — that’s 59 years! In total, it’s a gain of 5,502,284% — enough to turn an initial investment of, say, $1,000 into close to $45 million dollars. (The S&P 500 index, in contrast, averaged 10.4% annually during that period.)
Despite all of the admiration for the guy, there are often articles here and there questioning his investing moves. These happen most frequently during bull markets when growth stocks are outperforming Berkshire.
Here’s a look at how some have questioned Buffett and how — now — some are praising his seemingly prescient investing moves. There’s a lot we can learn from Warren Buffett, so I’ll review a few key tenets to consider.
Even in the highly esteemed periodical The Economist, you can find Buffett critics. Last September, for example, an article in it noted, “Between 2009 and 2023, Berkshire’s annual return averaged 13%, compared with 15% for the S&P 500.” That is true, and Buffett explained that due to its size (recently sporting a market value of $1 trillion), it’s not likely to grow as fast going forward as it did in the past. Still, it bested the S&P 500 in 2024 — 25.5% vs 25% — and in 2022, shares of Berkshire gained 4% while the S&P 500 sank by 18%.
In August, Andrew Bary in Barron’s noted, “The Berkshire Hathaway CEO is hunkering down by selling stocks and raising cash for the conglomerate, raising questions about whether he is souring on the outlook for the stock market and economy.”
Some may have seen Buffett as too cautious, as the S&P 500 gained 2.28% in August, followed by 2.02% in September, before dropping 1% in October and then surging 5.73% in November. That’s short-term thinking, though, and Buffett is famous for taking a long view. With the S&P 500 down more than 7% over the past month, Buffett’s moves are looking prescient. He’s now sitting on hundreds of billions of dollars, able to deploy them to buy great stocks or entire companies that are on sale.
Some questions about Buffett that I see as reasonable are ones concerning how his company will go on after he moves on to the stock market in the sky. Buffett is 94 years old, after all, and (probably) won’t live forever. Fortunately, Buffett hasn’t neglected to set up the company to thrive in the future. He has tapped one of his talented managers, Greg Abel, to succeed him in managing the many businesses under Berkshire’s roof and has two investing lieutenants, too, to oversee investments.