Warren Buffett is the most famous investor in the world. The company he took over back in the 1960s, Berkshire Hathaway, was a struggling textile mill in a dying industry. Today it is a multinational conglomerate that deals in furniture, jewelry, insurance, candy, and has ownership positions in some of the strongest companies in the world. The question that many people want to ask then is, how much is $10,000 invested in Berkshire Hathaway worth today?
The year is 1964, and the protégé of Ben Graham has just taken control of an ultimately doomed textile mill. That mill, Berkshire Hathaway, was trading with each individual share at a price of $19. With $10,000 you would have purchased 526 shares, and we’ll say you skipped going out to the movies to pay for the commission.
Three years later, Berkshire paid the infamous “bathroom dividend” of 10 cents a share. With 526 shares your dividend would have equaled $52.60. This is the one and only dividend that Warren Buffett has had Berkshire pay to its shareholders. The rest of your money came from the capital appreciation of your shares.
Today, each of the Berkshire Hathaway class A shares closed at a price of $238,100.05. Your 526 shares today would be worth $125,240,626. That’s right, more than $125 million dollars. The price of this level of wealth? Having to watch your shares of Berkshire collapse by 50% or more 4 times over that period. This is why I am such a believer in investing for the long term. When you hold the best businesses in the world like Coca Cola, you just have to save the money to invest. If you want to go scuba diving in the great barrier reef, businesses like Berkshire Hathaway and Coca-Cola will eventually reward you for your patience. The cost of this financial independence is watching your business eventually go out of favor for a time with the investing community, and watching periods of time where the stock declines by 50% or more.
$10,000 Invested in Berkshire Hathaway at Different Times
Over the decades Berkshire Hathaway has always been one of the best investments you could have made. $10,000 invested in Berkshire Hathaway in 1980 when the share price was around $300 is now worth around $7,936,668. If you wanted to wait until 1990 when the share price was around $7,000, that one share is now worth as you might have guessed $238,100.05.
If you have a desire to have $10,000 invested in Berkshire at todays prices, you have a fair deal. After the recent run-up of Berkshire Hathaway shares, you aren’t getting the relatively decent discount that was present for the long term buyers last year. Today, you are getting a pretty moderate discount. When dealing with such a great business like Berkshire Hathaway though, I wouldn’t be too picky.