Warren Buffett is stepping down as the CEO of Berkshire Hathaway at the end of this year.
His tenure has produced astonishing investment returns for shareholders. Financial writer Morgan Housel has the results:
The score card after Buffett announces he's stepping down this year:
5,502,284% for Berkshire vs 39,054% in the S&P 500.¹
He made returns from investing in the S&P 500 index—an index he recommends for investors—look meager. According to an article over at Barrons:
One of the most amazing statistics of his tenure is that Berkshire stock could fall 99% and still be ahead of the S&P 500 since Buffett took control of the company in 1965.²
He has witnessed many ups and downs during his multi-decade career and courageously invested befriending fear during dark times of market crises. For example, in 2010 he recounted what he did during the upheaval of the Great Financial Crisis:
We've put a lot of money to work during the chaos of the last two years. It's been an ideal period for investors: A climate of fear is their best friend. Those who invest only when commentators are upbeat end up paying a heavy price for meaningless reassurance. In the end, what counts in investing is what you pay for a business – through the purchase of a small piece of it in the stock market – and what that business earns in the succeeding decade or two.³
These twin lessons are common for Mr. Buffett: finding opportunity in market selloffs and purchasing companies at current low prices in the short-term that may succeed over the long-term. Short-term pain can be an opportunity for long-term gain.
Of course, this does not mean that investors should push their risk tolerance past their ability to handle it. He wrote near the Great Recession,
I have pledged – to you, the rating agencies and myself – to always run Berkshire with more than ample cash. We never want to count on the kindness of strangers in order to meet tomorrow's obligations. When forced to choose, I will not trade even a night's sleep for the chance of extra profits.⁴
Sleep is more important than being a hero. An investment portfolio that can bring contentment can be more existentially valuable than one that leads to constant stress.
One of my favorite anecdotes that I think describes Buffett's astronomical ability and humble persona comes from a shareholder that made a significant amount of money from investing in Berkshire. He thanked Mr. Buffett for how wealthy he made him, and the Oracle of Omaha responded:
I [didn't] make you rich. You didn't sell.⁵
Classic Uncle Warren.
Like an uncle, he is not afraid to speak his mind.
Recently, he has not been a fan of the tariffs of the current administration. He does not think they should be "a weapon" and believes that these kinds of things have "led to bad things. Just the attitudes it's brought out. In the United States, I mean, we should be looking to trade with the rest of the world and we should do what we do best and they should do what they do best."⁶
If you only listen to those that agree with you and massage your political or investment opinions, you may end up living in Biasville unable to see your own blind spots.
Remember, he has them too.
Maybe the greatest thing about him is that he, like all of us, has made investment mistakes. He knew that hubris and overconfidence can slay investors.
Surely, we can all learn from that too.
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Sources:
¹ From Morgan Housel on X May 3, 2025. Accessed online: https://x.com/morganhousel/status/1918735336974516428
² "Berkshire Stock Could Drop 99% and Still Top S&P 500 Over Buffet's 60-Year Reign", Andrew Bary, May 2, 2025. Accessed online: https://www.barrons.com/articles/buffett-berkshire-60-years-5bbd54cf?mod=barronsgooglenews
³ Letter, p. 15. Accessed online: https://www.berkshirehathaway.com/letters/2009ltr.pdf
⁴ Letter, p. 16. Accessed online: https://www.berkshirehathaway.com/letters/2008ltr.pdf
⁵ Taken from Sidecar Investor account on X on March 31, 2025 of a video interview with the shareholder. Accessed online: https://x.com/sidecarcap/status/1906797726328836131
⁶ "Warren Buffett knocks tariffs and protectionism: 'Trade should not be a weapon'", CNBC article, May 3, 2025. Accessed online: https://www.cnbc.com/2025/05/03/warren-buffett-knocks-tariffs-and-protectionism-trade-should-not-be-a-weapon.html