The following is my answer to a Quora
question: “What
is your favorite thing about investing in Berkshire Hathaway for the long haul?”
Over the last 50 years, ever since Warren
Edward Buffet took control in 1965, Berkshire Hathaway stocks have given a compounded
return of just over 20% annually. To put
that in perspective, if you had US$10,000 in the stock in 1965, it would be
worth US$250 million now. That alone is
testament to the genius that is Warren Buffet.
Even now, Berkshire Hathaway is essentially
undervalued. Despite the US$15.4 billion
write down on the value of Kraft Heinz, which cost a US$4.5 billion book loss,
Berkshire Hathaway was sitting on US$120 billion in cash reserves as recently
as last quarter. They spent some of it
in stock buyback, but that is a testament to the strong financial health of the
company. If you intend to have funds
aside over an extended investment horizon, this stock is a must buy.
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