Buffett vs. the market: Charting 58 years of Berkshire Hathaway's returns

Over the weekend, thousands of people descended on Omaha, Nebraska to hear two nonagenarians talk shop. The shop, in this case, is the $700bn+ conglomerate Berkshire Hathaway — still run by 92-year-old CEO Warren Buffett and his business partner Charlie Munger, who is just 8 months away from celebrating his 100th birthday.

Often dubbed the “woodstock of capitalism”, the annual Berkshire shareholder meeting is an event like no other, as Warren and Charlie field questions on the economy, their investments and even some more philosophical questions.

‍Buffetting the odds

‍This year’s meeting comes off the back of a good year for Berkshire, as the company outperformed the S&P 500 Index by some 22%. That’s Berkshire's best market-relative year since 2007, although it remains a far cry from the 30-100% outperformance that was common in the early days. Buffett and co. were able to be more nimble with their investments 40 years ago — when they were “only” managing millions of dollars. Now that the sums involved are billions, or tens of billions, there are only so many places to put that kind of cash.

One of those places has been Apple, a company that Berkshire now owns ~6% of, after investing in 2016. That decision has been a masterstroke, as Buffett calls Apple simply a “better” business than pretty much any other it owns, praise that CEO Tim Cook, who was in attendance, would have appreciated. The rest of the company’s sprawling interests range from insurance and railroads to Coca-Cola and candies, though it's been the conglomerate's oil investments that have been paying off in the last year or so.

As always, Buffett’s longstanding view in the United States was on show, saying that if he had his time again, he would still choose to be born in the USA. His other steadfast belief, that people doing "dumb things" creates opportunities, was just as intact.