Warren Buffett is leading Berkshire Hathaway to new heights at the age of 94

Warren Buffett turned 94 on Friday and his vast, unique conglomerate has never been worth as much as it is today.

Berkshire Hathaway this week became the first non-tech company with a market cap of $1 trillion. Berkshire Class A shares also surpassed $700,000 each for the first time ever.

Howard Marks, himself a great investor and friend of Buffett, mentions three things that have allowed the “Oracle of Omaha” to lead Berkshire to new heights, even in his old age.

“It has been a matter of a well-thought-out strategy, pursued for 70 years with discipline, consistency and uncommon insight,” said Marks, co-founder and co-chairman of Oaktree Capital Management. “Discipline and consistency are essential, but not sufficient. Without the unusual insight, he clearly would not be the greatest investor in history.”

“His record is a testament to the power of compounding at a very high pace over a very long period of time, uninterrupted. He has never taken a leave of absence,” Marks added.

In the middle of the go-go stock market of the 1960sBuffett used an investment partnership he led to buy then-bankrupt New England textile company Berkshire Hathaway. Today, his company is unrecognizable more than it ever was, with operations ranging from Geico Insurance to BNSF Railway, a stock portfolio worth more than $300 billion and a monstrous cash fortune of $277 billion.

Generations of investors who have studied and imitated Buffett’s investing style have been impressed by his smart moves for decades. The Coca-cola The late 1980s bet provided a lesson in investing in patient value in strong brands with wide moats. Injecting a lifeline investment into Goldman Sachs at the height of the financial crisis showed an opportunistic side during crises. Do everything you can Apple spoke in recent years about his flexibility in taking his values ​​approach into a new era.

Buffett made headlines earlier this month by revealing that he had dumped half of those Apple holdings, blowing the whistle on an extremely lucrative transaction. (Although Apple is widely viewed as a growth stock, Buffett has long argued that all investments are value investments: “You spend some money now to get more later.”)

Decades of good returns created a snowball effect and he has built an unparalleled track record. Berkshire shares have generated an annualized gain of 19.8% between 1965 and 2023, nearly doubling the S&P 500’s 10.2% return. Cumulatively, the stock has risen 4,384,748% since Buffett took over took over, compared to the S&P 500’s 31,223% return.

“He is the most patient investor ever, which is a big reason for his success,” said Steve Check, founder of Check Capital Management whose largest holding is Berkshire. “He can sit and sit and sit. Even at his age, where there isn’t much time to sit anymore, he will sit until he feels comfortable. I just think he will continue to do his best until the end doing. .”

Buffett remains chairman and CEO of Berkshire, although Greg Abel, vice chairman of Berkshire’s non-insurance business and Buffett’s designated successor, has taken on many responsibilities at the conglomerate. Earlier this year, Buffett said that 62-year-old Abel will make all investment decisions when he is gone.

Buffett and Marks

Oaktree’s Marks said Buffett reinforced concepts integral to his own approach. Like Buffett, he is indifferent to macro forecasting and market timing; he relentlessly searches for value while clinging to his own circle of competence.

“He doesn’t care about market timing and trading, but when other people get terrified, he marches in. We try to do the same thing,” Marks said.

buffett who studied at Columbia University under Benjamin Grahamhas advised investors to view their shareholdings as small pieces of companies. He believes that volatility is a big plus for the true investor because it offers the opportunity to profit from emotional selling.

Oaktree, with $193 billion in assets under management, has become one of the largest alternative investment players in the world, specializing in distressed loans and bargain hunting.

Marks, 78, has become a sharp, unequivocal contrarian voice in the investment world. His popular investment memos, which he began writing in 1990, are now considered required reading on Wall Street and have even received praise from Buffett himself: “When I see Howard Marks memos in my mail, they’re the first thing I open and read, I always learn something.”

The two were introduced in the wake of Enron’s bankruptcy in the early 2000s. Marks revealed that Buffett ultimately motivated him to write his own book.Most importantly, bad sense for the thoughtful investor“ – more than ten years ahead of his own schedule.

“He was very generous with his commentary. I don’t think this book would have been written without his inspiration,” Marks said. “I planned to write a book when I retired. But thanks to his encouragement, the book was published thirteen years ago.”

Buffett’s trajectory and his ability to enjoy what he does into his 90s also struck a chord with Marks.

“He says he doesn’t go to work in the morning. He approaches investing with enthusiasm and pleasure,” said Marks. “I have not yet retired, and I hope never to do so, following his example.”