For 50 years now, Warren Buffett's Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) has returned close to 20% compounded annual growth in book value. The most recent figures presented in the firm's annual letter to shareholders touts a 798,981% overall gain from 1964 through 2015. Buffett is no doubt a living legend.
"Berkshire Hathaway is… a grizzled veteran. It's one of investing's all-time champion companies, but in recent years it has had almost as many misses as hits. The company's utterly baffling decisions continue to mount, now occurring at an almost-quarterly pace."
In his most recent shareholder letter, Buffett displayed his exceptional candor in admitting error, and humbly predicted future ones:
"In most of these cases, I was wrong in my evaluation of the economic dynamics of the company or the industry in which it operates, and we are now paying the price for my misjudgments. At other times, I stumbled in evaluating either the fidelity or the ability of incumbent managers or ones I later appointed. I will commit more errors; you can count on that. If we luck out, they will occur at our smaller operations," wrote Buffett.
Apple, of course, is a large operation. Has the Oracle of Omaha lost his touch? Or is the same method that has delivered such high returns over the past many decades still in play? Please add your comments below.
Now for the day's advisor-related news and views:
- Soros doubles bet against S&P 500.
- Tax reform's not going to do it; we need a tax revolution, argues Kevin Wilson.
- Certain aspects of greed are measurable in a lab-part of our make-up; but what do investors do about those who are greedier than we are?
- Mark Hebner: Failure of active management can be seen empirically on a global level.
- Eric Parnell, CFA: The market desperately needs some "E" or the "P" might take matters into its own hands.
- IMF wants debt relief for Greece through 2040.
- Columbia Threadneedle advises investors to focus on consistency of returns.
- Nanette Abuhoff Jacobson breaks down Brexit's investment implications.
- Sam Kovacs views investing through the prism of the chessboard.
- Top actively managed ETFs, listed by market share.