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Berkshire Hathaway grows from humble beginnings to global giant
(MENAFN) Over the past four decades, Berkshire Hathaway has undergone remarkable growth, transforming from a relatively modest enterprise in 1980 to one of the most valuable companies in the world today. A testament to its success, an investment of USD250 in Berkshire Hathaway in 1980 would have yielded over USD500,000 by present-day standards. Such exponential growth is underscored by the company's market capitalization, which has soared from less than USD5 billion in 1980 to approximately USD900 billion today.
However, with its expansive growth trajectory, Berkshire Hathaway has experienced a natural slowdown in its rates of expansion. As the company has burgeoned in size, doubling its market value becomes increasingly challenging. This is evident in the comparison between its growth rates in different periods. For instance, between 1993 and 1998, Berkshire shares surged by an impressive 320 percent. In contrast, over the last five years, the value of shares has increased by a more modest 91.6 percent. Consequently, an investment of USD250 made five years ago would now be valued at USD476. Despite this deceleration in growth rates, Berkshire Hathaway continues to outperform the broader market. For instance, over the same five-year period, the S&P 500 returned 87.5 percent.
While Berkshire Hathaway may no longer be outpacing the market by significant margins, it remains a high-quality company under the leadership of Warren Buffett, widely regarded as one of the most successful investors in history. However, it's worth noting that investing in Berkshire Hathaway is no longer feasible with just USD250. The company's shares, particularly its class B shares, now trade at around USD400, necessitating a higher minimum investment. Nonetheless, for investors who can meet this requirement, investing in Berkshire Hathaway still holds promise for long-term gains and stability.
However, with its expansive growth trajectory, Berkshire Hathaway has experienced a natural slowdown in its rates of expansion. As the company has burgeoned in size, doubling its market value becomes increasingly challenging. This is evident in the comparison between its growth rates in different periods. For instance, between 1993 and 1998, Berkshire shares surged by an impressive 320 percent. In contrast, over the last five years, the value of shares has increased by a more modest 91.6 percent. Consequently, an investment of USD250 made five years ago would now be valued at USD476. Despite this deceleration in growth rates, Berkshire Hathaway continues to outperform the broader market. For instance, over the same five-year period, the S&P 500 returned 87.5 percent.
While Berkshire Hathaway may no longer be outpacing the market by significant margins, it remains a high-quality company under the leadership of Warren Buffett, widely regarded as one of the most successful investors in history. However, it's worth noting that investing in Berkshire Hathaway is no longer feasible with just USD250. The company's shares, particularly its class B shares, now trade at around USD400, necessitating a higher minimum investment. Nonetheless, for investors who can meet this requirement, investing in Berkshire Hathaway still holds promise for long-term gains and stability.
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