Wowsers. Last night I ran through the latest share prices of the constituents of the Biznews Share portfolio and got a shock. A very pleasant one. But also a reminder of the sheer brilliance of Warren E Buffett, the Oracle of Omaha.
Our portfolio, which kicked off with $200,000 in early December 2014, is now worth almost $570,000. In Rand terms that translates into starting capital of R2.25m turning into almost R10m in less than six years. That incredible growth was boosted by two fortuitous investments – Amazon at $328 a share (now $2,700) and Sasol at R28 (now R141).
I’ve previously been calculating the return by annualising the growth by dividing it over the months the portfolio has been running. That inflates reality as it takes no account on the growth achieved on reinvested profit. So, for a better measure, I ran the numbers through a Compound Annual Growth calculator, which spat out an annual US Dollar return of 21%.
Everything that could have gone right in those five and a half years has done. It’s crazy to expect it to continue for the next five, much less ten times longer. Yet that is precisely what Warren Buffett has delivered. The latest Berkshire annual report shows Buffett gave shareholders a compound annual gain of 20.5% in the 54 years since 1965. What’s spectacular for the rest of us, is simply run of the mill for the 89 year old investing genius.
* We’ll be updating the Biznews Global Share portfolio at noon today, exclusively for Premium members – register here: https://attendee.gotowebinar.com/register/707564726897634829.
* My colleague Linda van Tilburg is also back this week with the Midweek Catchup webinar, she’ll be exploring the court ruling that’s set to shake up SA politics with former DA leader Mmusi Maimane. It’s open to all, you just need to register here: https://attendee.gotowebinar.com/register/4587024380380999180.
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