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Berkshire’s 60-Year Edge Over S&P 500

COMMENTARY

September 23, 2026 at 00:05 UTC

1 min read

Berkshire Hathaway’s (BRK-B) long-run performance gap versus the S&P 500 (SPX) is now arithmetically extreme. From a $1 starting point in 1965, Berkshire’s (BRK-B) cumulative return has compounded so far beyond the index that the wealth paths have completely diverged.

On the same 1965 base, a $1 investment in Berkshire (BRK-B) grows to roughly $55,000, while $1 in the S&P 500 (SPX) reaches about $400 using total-return calculations. That ratio translates to Berkshire delivering well over 100 times the terminal wealth of the benchmark over roughly six decades.

Because of this gap, a long-horizon Berkshire investor starting in 1965 could endure an approximately 99% price decline from current levels and still end up with a terminal value roughly matching or exceeding the S&P 500’s (SPX) compounded outcome. The scale of the outperformance effectively embeds a massive historical cushion into Berkshire’s price history.

This effect is economically shared across Berkshire Hathaway Class A (BRK.A) and Class B (BRK.B) shares, which represent the same underlying conglomerate. On the benchmark side, popular S&P 500 trackers such as SPDR S&P 500 ETF Trust (SPY) and Vanguard S&P 500 ETF (VOO) mirror the index leg of this comparison.

The pattern has also been persistent across time, with Berkshire outperforming the S&P 500 in roughly two-thirds of calendar years over the 1965-2024 window. Annualized, this translates to Berkshire delivering close to 20% per year versus a substantially lower rate for the index, which mathematically compounds into the extreme terminal-wealth differential now observed.

Terminology

  • 01Total-return: Performance measure including price changes plus reinvested dividends or interest income.
  • 02Annualized return: Average yearly growth rate that would produce the same cumulative performance.

References

  1. https://www.cnbc.com/2025/05/05/warren-buffetts-return-tally-after-60-years-5502284percent.html
  2. https://www.berkshirehathaway.com/letters/2016ltr.pdf
  3. https://www.statista.com/chart/34413/how-berkshire-hathaway-outperformed-the-market-over-60-years/
  4. https://www.ainvest.com/news/berkshire-hathaway-compounding-machine-defied-500-60-years-2505/
  5. https://finance.yahoo.com/news/invested-10k-berkshire-hathaway-warren-140149614.html
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