Warren Buffett is stepping down as CEO of Berkshire Hathaway (BRK-A, BRK-B) after leading the company to a mind-boggling run of stock outperformance against the S&P 500 (^GSPC).
From 1965 to 2024, Berkshire Hathaway stock has returned 5,502,284%. In that same time period, the S&P 500, with dividends included, has provided a return of 39,054%. Berkshire Hathaway’s compound annual gain over that period tallied 19.9%. The S&P 500’s return was 10.4%.
Digging into the details of Buffett’s outperformance, most of Berkshire Hathaway’s gain came in the first 20 years since Buffett took control of the company. Berkshire’s consistent resilience compared to the broader market also stands out. In the 13 times the S&P 500 closed the year lower over the past 60 years, Berkshire fell more than the benchmark index only twice.
“The long-term trend is up,” Buffett said at Berkshire Hathaway’s annual shareholders meeting on Saturday.
During the meeting, Buffett addressed Berkshire Hathaway’s growing pile of cash. At the end of the first quarter, Berkshire had amassed a cash pile of $347.7 billion. Buffett noted that his confidence in raising cash and not feeling the need to be fully invested at all times is one reason he’s been successful over such a long period.
“We would rather have conditions that have developed where we would have, like, $50 billion or something like that,” he said. “But that just isn’t the way the business works.”
Buffett added that if he made investments simply for the purpose of getting Berkshire’s cash holdings down to $50 billion, “That would be the dumbest thing in the world to invest in that manner.”
On Saturday, Buffett announced he planned to step down from his role as Berkshire Hathaway’s CEO and pass his role onto Greg Abel.
“I think it’s the time has arrived where Greg [Abel] should become the chief executive officer of the company at year-end,” said Buffett, who was chairing his 60th annual meeting. “And I want to spring that on the directors, effectively, and give that as my recommendation.”
Berkshire Hathaway’s board unanimously approved the move on Sunday. Abel will become CEO on Jan. 1 2026, and Buffett will remain chairman of the board of directors.
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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