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I've written about Warren Buffett, and his company Berkshire Hathaway, before.
A lot, actually.
Why? Well, lots of reasons, usually related to Buffett's investment genius. And also, given he's run the company for the best part of six decades, to illustrate longevity and compounding.
And I'm going back to all of those wells again, today.
Yes, I'm beating that same drum, to mix my metaphors, because those are points well worth making.
But today, the point is being made for me, by one very significant number.
A seven-figure number, at that.
See, Berkshire Hathaway has two classes of shares – the original 'A' class shares, and the much cheaper 'B' class shares that were created by the company years ago to make them more accessible.
(If you're interested, some A class shares were split into 1,500 pieces each to create the B class shares. So the B class shares usually sell for around 1/1500th of the price of the As. The latter are the ones I own, unfortunately!)
And, this morning, I did some very simple maths.
Berkshire shares are up 20.4% so far in 2024. Which is impressive, if too often ignored in the quest for 'sexy' tech companies.
I don't tell you that for any other reason than to highlight that the value has grown this year.
The A class shares are now selling for US$662,124 each. Which is extraordinary.
But let's make it more relevant by bringing it back to Aussie dollars.
At the current exchange rate of around 65.36 US cents for every Australian dollar, that makes Berkshire's A class shares worth…
$1,012,810
Each!
Yes, for the first time, there's a company whose shares are selling for over one million Aussie dollars per share.
Now, I've said before that the per-share price of a company doesn't necessarily tell you anything.
Woolworths Group Ltd (ASX: WOW) market capitalisation (the total price of all of its shares, added together) is $42 billion.
If that value was broken up into just ten shares, they'd sell for $4.2 billion each. If there were 42 billion shares, they'd change hands for $1.
So the per-share price isn't always a measure of success. Or value.
But in this case… it is.
Buffett took control of Berkshire Hathaway in 1965, having started buying shares three years earlier. The share price at the time? About US$15.
So, in the following 59-odd years, it's gone from $15 to $662,000. No, that's not a typo.
I hope, though, it does give you a sense of what's possible.
(I hope it also reminds you that even after going from $15 to $550,00 by the beginning of this year, that there was still another 20% to be gained. Don't believe large, high-quality, companies can't keep growing!)
Yes, Buffett is a genius, as a man as an investor. He's a learning machine.
I'm sorry to tell you that neither you nor I are in his class.
But there are two things we can emulate.
Firstly, we could have bought those shares at any point in the company's history, and our returns would have matched those of Buffett's Berkshire from that point forward.
And second, even if we can't be Warren Buffett, we can still put the awesome power of compounding on our side. I don't know about you, but even if I only did half as well as Buffett, and turned $15 into only $331,000, I'd be pretty happy with the outcome!
We may never see another Warren Buffett in our lifetimes, but he offers us a million-dollar lesson that is ours to learn, should we choose…
Fool on!
