Warren Buffett's Berkshire Hathaway Compounded at More Than 19% a Year Over 6 Decades, Nearly Double the S&P 500's 10% Return. Can Investors Still Apply That Playbook Today?

There will never be another Warren Buffett. From 1964 to 2024, the CEO of Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) achieved legendary returns of 5,502,284%. That amounts to compounded annual growth of about 19.9% -- nearly twice the gains of the S&P 500 (SNPINDEX: ^GSPC), which delivered 10.4% annualized returns during those six decades.

It's highly unlikely that anyone reading this can apply exactly the same playbook that Warren Buffett used to get rich. But there are a few key mindsets and model behaviors from Buffett's career that any investor can emulate.

Former Berkshire Hathaway CEO Warren Buffett. Image source: Getty Images.

Buy great companies that you believe in

Warren Buffett was not a penny-stock buyer. He didn't chase trends or follow fads. Instead, he bought stocks in companies that were often undervalued by the rest of the market. He owned stocks in high-quality companies with steady cash flows, strong business models he understood, and often sold products he personally used and/or enjoyed, like Coca-Cola (NYSE: KO).

How to be like Buffett: Buy stocks in companies that you understand, that you believe in, that you're rooting for, and that you think can generate long-lasting returns.

2. Hold onto your investments for the long term

Buffett was not a short-term speculator or day trader. When he bought a company's stock, he typically intended to hold it for years. For great companies that Buffett really believed in, he said that his "favorite holding period is forever."

Does this mean that you should never sell stocks? No. Sometimes investors need to take profits or cut losses. But this mindset shows how a long-term investing approach can help all kinds of investors build serious wealth -- even if they never reach Buffett's level of annualized returns.

How to be like Buffett: Keep investing consistently and hold your stocks for the long term -- for 60 years or more, if you're lucky.

3. Buy index funds

Warren Buffett is perhaps the most successful stock picker of all time. His record of beating the market might never be beaten. But he also famously said that most people should buy low-cost S&P 500 index funds. Buying funds like the Vanguard S&P 500 ETF (NYSEMKT: VOO) can serve as a strong foundation of an investment portfolio in a simple, low-fee way.

You don't have to beat the market to get rich. If you want to choose individual stocks or sectors you're passionate about and enjoy following the markets and being a more active investor, that's totally fine. But many investors shouldn't try to be like Buffett. Instead, they should follow his advice and keep buying the S&P 500 regularly.

How to be like Buffett: Keep investing in stocks, even if you are just buying the S&P 500, rather than picking individual stocks. Many stock pickers fail to beat the market for long. But it's possible to build significant wealth by investing in the stock market over many years.

Ben Gran has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.