Warren Buffett outperforms S&P 500 by 140x with 5.5 million% return at Berkshire Hathaway

Warren Buffett has officially left behind a performance that buries every stock index in sight. Since 1964, Berkshire Hathaway has returned 5.5 million percent, dwarfing the S&P 500’s return of roughly 39,000 percent over the same period.

If someone dropped $10,000 into Berkshire six decades ago, they’d be sitting on $550 million right now. The S&P 500 couldn’t keep up even if it grew legs. Warren beat it by 140 times.

The numbers were on everyone’s mind this weekend at Berkshire’s annual meeting in Omaha, Nebraska, where thousands of shareholders gathered without knowing they were walking into a bombshell.

Warren, now 94, said he plans to step down by the end of the year, a move no one at the arena expected. The man who turned a dying textile company into a $1.2 trillion beast said this would be his final run as CEO.

Buffett shocks crowd with exit plan after 60-year run

“I’m stunned,” said Jim Ross, a shareholder and bookstore manager who lives just four doors down from Warren’s house in the Dundee–Happy Hollow neighborhood of Omaha. The shock hit hard because Warren had only informed two of his kids, both on Berkshire’s board, before making the announcement.

Everyone else, including the rest of the board, heard it live. Warren ended the hours-long Q&A by telling the crowd that he’d ask the board to approve the transition during their Sunday meeting. He confirmed that Greg Abel, who runs Berkshire’s energy division, will take over the CEO role.

“I think the time has arrived where Greg should become the chief executive officer of the company at year end,” Warren said. He also made it clear he’s not selling any of his Berkshire stock and will stay connected to the company in some way.

If the board gives it the green light, Warren’s departure would close out a 60-year run in charge of the company. This year’s event was already shaping up to be different. There was no intro video, and Warren’s Q&A session was shorter, with quicker breaks between segments.

Berkshire auctioned off signed copies of a new book about the company’s history, with all proceeds going to a homeless charity in South Omaha.

Grant Macklem, a software engineer from Colorado Springs, flew in because he wanted to see Warren one last time as CEO. He’s been holding Berkshire shares for 15 years and said, “We could kind of see it coming someday, just, I didn’t expect it this year.” Grant said he thought about buying more stock before the meeting but didn’t get around to it. Now he’s considering grabbing some if the price drops. Shares had just hit an all-time high on Friday.

Others who’ve followed the company closely weren’t as surprised. David Kass, a finance professor at the University of Maryland, said Warren walking with a cane and his 2024 letter where he hinted that Abel might soon write the shareholder memo made the writing on the wall obvious. “The announcement memorializes some of what we already knew,” said Bill Stone, CIO at Glenview Trust Company. “Greg has effectively been running the operating businesses day to day. But he will also now take over capital allocation decisions.”

The company has changed since Charlie Munger, Warren’s longtime friend and business partner, died in 2023. For fund managers, succession has been the big question. “Berkshire is no longer a stock picker with great cash flow. Now a group of well-known businesses with cash to reinvest,” said Bill Smead, CIO at Smead Capital Management. “Losing Charlie and age have ended the era for Warren.”

The crowd in Omaha made it clear how much he still means to them. Many had lined up in the early morning just to be in the room. After Warren’s announcement, the arena rose to its feet in applause. People wore t-shirts and hoodies with his face on them.

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