10 May 1965: Warren Buffett takes control of Berkshire Hathaway
On May 10, 1965 Warren Buffett's partnership took control of Berkshire Hathaway, a struggling New England textile maker he had bought partly out of irritation with management. Buffett later called it one of his worst investments, a mistake he guessed cost hundreds of billions. Yet he used the dying mill as a vehicle to buy insurance companies and other businesses, building one of the most valuable companies in America.
The lesson: A poor business can still become a great vehicle if the capital is redeployed wisely.
What it meant for investors
$1,000 in Berkshire Hathaway at the start of 2000 → $12,500 today, vs $4,626 in the S&P 500.
We start the clock at the start of 2000, the first year in our price data after the event. That is 12.5 times the money, and $7,874 more than a plain index fund made over the same years.
What Berkshire Hathaway teaches: Being willing to look foolish during a mania, and keeping cash for the moment others are forced to sell, is a durable source of returns.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 2000 | $40.00 | $12,500 | $4,626 |
| 2003 | $48.00 | $10,417 | $7,727 |
| 2005 | $59.00 | $8,475 | $5,763 |
green = beat the S&P 500 · red = lost money
What if you bought Berkshire Hathaway? Every starting year and the full story →
More Berkshire Hathaway history
- 14 February 2013: Berkshire and 3G buy Heinz
- 28 February 2009: Buffett's letter: beware of geeks bearing formulas
- 30 August 1930: Warren Buffett is born in Omaha
Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
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