Buffett's numbers

At 94, Warren Buffett, the undisputed best investor of all time, announced that he will step down as CEO of Berkshire Hathaway at the end of 2025. Undoubtedly, this marks a before and after for the financial markets of recent years, which kept the “Oracle of Omaha” as a constant reference.

Buffett's numbers are incredible; since the start of his tenure, he has achieved a return of 19.9% per year, or 5.5 million percent in total. It's not a typo—for more than 60 years he achieved returns nearly double those of the S&P 500. This is even more incredible considering that his strategy is value investing, that is, he looks for companies trading at a “low” price relative to their fundamental value. This style has performed 3.5% lower annually over the past 20 years than high-growth (growth) companies that trade at higher multiples. Even so, Berkshire has managed to pick historic winners such as Coca-Cola (added to its portfolio in 1988), American

Express (first investment in 1964) or even more modern companies like Apple since 2016.

Replicating Buffett is impossible, but we mustn't forget that his advice for managing one's own or family portfolios is not to try to beat the market but to invest in highly efficient, low-cost funds—and today we can all do that, easily.

Original publication in La Segunda.