Berkshire Hathaway Outperformed the S&P 500 Over a 60-Year Period Under Warren Buffett. Here's the Stock That Could Help Continue the Streak Under Greg Abel.
Even if the conglomerate's share price tanked 99% tomorrow, it would still have beaten the S&P 500 index in the past six decades.
Overview
Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) shares have risen by 236% over the past decade (as of Sept. 2). Critics are quick to point out that this performance came in lower than the total return of the S&P 500 index. It's easy to question the conglomerate's capital allocation decisions.
However, over the past six decades, Berkshire Hathaway's stock price has compounded at an annualized rate of 19.7%. This trounces the S&P 500 index's 10.5% average annual total return. The company's long-term track record is so extraordinary that even if the Omaha firm's shares fell by 99% tomorrow, they still would have beaten the benchmark over the trailing-60-year period.
Details
Warren Buffett deserves all the praise. His successor, Greg Abel, is now tasked with directing capital allocation decisions for the massive $1.1 trillion enterprise. Investors hope that Berkshire Hathaway shares will outperform the S&P 500 index in the coming decades.
Source
Originally published at www.fool.com.