Investing GOAT, Berkshire Hathaway (BRK.A, BRK.B) Chair and CEO Warren Buffett is often credited as the touchstone for how to put money to work. 🐐 The evidence is in his track record. Berkshire’s average compounded annual return over the last 56 years - JK Rowling’s entire lifetime - is 20.1%, which is close to double the S&P 500. But with the S&P 500 rocketing 28.7% in 2021 (including dividends), could the 91-year-old keep up? You bet!
In 2021 Berkshire returned 29.6%, squeaking past the S&P 500, which is no small task for a company as big as Berkshire. What’s his secret? 💭 In Berkshire’s letter to investors released over the weekend, Buffett reminded investors that his sights are always squarely focused on investing in businesses rather than trying to profit from the movements of markets. Specifically, businesses with a durable economic advantage and a first-class CEO. ‘Charlie and I are not stock-pickers; we are business-pickers,’ says Buffett. Still, for a couple of wisened business-pickers, Buffett and Munger sure have impeccable timing!
Berkshire took a quick win with the timing of their recent investment in Activision Blizzard (ATVI) buy, just months before Microsoft (MSFT) announced an offer to buy the company for US$69 billion. We know Buffett loves bridge, but could he be a secret Candy Crush fan too? 🍭 The step into gaming is another sign Berkshire is becoming more comfortable with our tech-based world. The shares sit alongside Berkshire's monster 5.6% holding in Apple (AAPL) and smaller holdings in Amazon (AMZN) and Snowflake (SNOW).
After the retail investor surge in 2021, Buffett also highlights that being a small investor can be a big advantage. Small but mighty investors can easily scoop up pieces of great companies rather than having to negotiate to buy a whole company, taking advantage of bargain prices when they appear and selling quickly if they decide they’ve made a mistake. 🩹