Happy 200,000th, Warren!!
Multi-billionaire investor Warren Buffett is old…but he's not that old.
No, today we're celebrating the fact that the stock of his company, Berkshire Hathaway Inc. (NYSE: BRK.A) has reached the price of – get this- US$200,000 a share! For investors who follow the company and the investing success of the "Oracle of Omaha", they know that price is not a mistake or the result of some "fat finger" trade.
To give you some perspective, 30 years ago in 1984, the share price was…US$1,300. That works out to be a share price return of 152.8 times the original price, or 18.2% compounded annually. That's phenomenal!
However, 19 years before in 1965, the company's share price was US$18 a share when Buffett took over the company. So over 49 years, the share price return would be about 20.9% compounded annually. A single US$1 invested then would now be worth about US$10,936!
Ok, now it's your turn!
You may not make the same returns as his company has, but you can start working on your own fortune. Even set your bar a little lower and try for a 10% annual return so that you at least double your portfolio value every seven years. If you get more, thank Warren for the inspiration.
Here are two quality stocks that could get you off to a strong start.
— Woolworths Limited (ASX: WOW) by now is on many investors' watchlists, but how many of them have benefited from the long-term growth the supermarket and general retailer has delivered in the past ten years? Since 2004, the share price went from about $11 to around $36.12 and dividends have almost tripled also.
Over the next 20 – 30 years, Woolworths will probably still be in business. The growth could be slower, but it's the compounding returns that could make it much more valuable in the future. It offers a 3.8% dividend yield fully franked.
— SEEK Limited (ASX: SEK) has grown its earnings per share by over five times since listing in 2005. The operator of the job search website seek.com.au plans to maintain its market-leading status, as well as expand into Asia, where larger job markets are developing in growing economies like China and Malaysia. It has a relatively high 30 price/earnings ratio, yet the growth potential could possibly justify it.
This fast grower has a 1.6% yield, but it pays out about half of its per share earnings as dividends. As the business and profits grow, so can the dividend payments.
To Warren, from all the Foolish investors-
Thanks for showing us how it's done! And many happy returns!
