Berkshire Hathaway Outperformed the S&P 500 Over a 60-Year Period Under Warren Buffett. Here's the Stock That Could Help Continue the Streak Under Greg Abel.
Berkshire Hathaway has historically outperformed the S&P 500, and investors are looking to see if new CEO Greg Abel can maintain this trend. Apple remains a critical component of the company's portfolio and a key factor in its future performance.
Why it matters
As a major investment conglomerate, Berkshire Hathaway's performance and leadership transition are significant indicators for the broader financial market.
Berkshire Hathaway ( BRKA -0.48% ) ( BRKB -0.41% ) shares have risen by 236% over the past decade (as of Sept. 2). Critics are quick to point out that this performance came in lower than the total return of the S&P 500 index. It's easy to question the conglomerate's capital allocation decisions.
However, over the past six decades, Berkshire Hathaway's stock price has compounded at an annualized rate of 19.7%. This trounces the S&P 500 index's 10.5% average annual total return. The company's long-term track record is so extraordinary that even if the Omaha firm's shares fell by 99% tomorrow, they still would have beaten the benchmark over the trailing-60-year period.
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