A $250 investment can go a long way. If you had invested this sum in Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) back in 1980, you’d have more than $500,000 today.
Time travel isn’t possible, but what if you had invested in Berkshire stock more recently? Are shares still rising as fast as they did in 1980?
Is Berkshire stock still beating the market?
Berkshire is a lot bigger today than it was in 1980. Back then, its market cap was under $5 billion. Today, the company is worth nearly $900 billion. Getting bigger, naturally, means growth rates have slowed. After all, it’s significantly harder to double in size as a $900 billion company than as a $5 billion company.
For the five-year period between 1993 and 1998, for example, Berkshire shares rose in value by 320%. Over the last five years, however, shares have increased in value by only 91.6%. A $250 investment five years ago would be worth only $476 today. That’s still better than what the overall market returned, however. Over the last five years, for instance, the S&P 500 index returned 87.5%.
Berkshire stock isn’t beating the market by leaps and bounds anymore, but it’s still a high-quality business managed by one of the best investors in history, Warren Buffett. Just know that a $250 investment is no longer even possible. The company’s B shares — its cheapest share class — now trade at around $400. If you can meet that minimum investment, putting the money into Berkshire still makes a ton of long-term sense.
Should you invest $1,000 in Berkshire Hathaway right now?
Before you buy stock in Berkshire Hathaway, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Berkshire Hathaway wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $466,882!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of April 18, 2024
Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.
If You’d Invested $250 in Berkshire Hathaway 5 Years Ago, Here’s How Much You’d Have Today was originally published by The Motley Fool
Source: finance.yahoo.com