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Stocks B / Berkshire Hathaway


Subject:  Re: BRK Stock Return 1965 to Present Date:  6/6/2014  1:29 PM
Author:  michaelservet Number:  211226 of 257827

An oft-quoted nugget about Berkshire is that a $10,000 investment in 1965 (when Buffett started buying shares) would be worth over $50 million today. Can anyone find a primary source for this info?

I can give you a real life example over that time stretch. I’ve been a shareholder since those days – not long after Buffett gained control but before he was actually on the board. My cost then was $20. Theoretically it may have been possible to pick up a few shares for a few dollars less in those days, but from a practical point of view the stock was very thinly traded and Buffett (and the company) had been aggressively vacuuming up any shares offered.

Looking back I saw that the annual reports from that period did not note market prices like they do today. However, according to an old share buy-back offering memorandum issued by Berkshire a bit later, in 1967**, during 1965 market prices ranged from a low of $13.50 in the first quarter of 1965 to a high of $20.50 in the fourth quarter.

(For anyone who thought they may have missed the boat at those prices, in 1966 the range was a high of $27 in the second quarter down to a low of $17.50 in the fourth quarter of ‘66, and Berkshire was trading in a range of $17.50 to $18 in May 1967 when Berkshire made a general offer to buy in any outstanding shares at $20 -- not for cash, but for 7.5% 20-year debentures to be issued by the company).

Anyway, from a practical point $20 is a probably a good ball-park starting point.

I’m thinking that whenever you saw that quote you mentioned about appreciation, the BRKA price may have been under today’s $190k levels, which might account for another component of the difference. In any case, it would appear that if you looked at it today, assuming you did pick up 500 shares at $20 per, that $10,000 would be more like $95 million at the moment (pre-tax) if my math is correct.

Of course, you can’t count your chickens until you do sell, so there is no assurance of realizing today's prices, and then there’s also the tax man. So maybe $50 million is as good a feel-good talking number as any. Or $70 mill, or the full $95 mill.


** I have to thank certain readers of this board for prodding me to look to see if I even had some of this old material. Much to my great surprise and after a thorough search through boxes of files, some of which would doubtless have been otherwise tossed, I found that I really do have the entire 50 years of original annual reports, as well as some arcane materials like that buy-back offer memo!
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