Bottom Line Up Front: Warren Buffett has long predicted that they’re getting too big to see the sizeable returns they saw for the first many years of Berkshire Hathaway's (BRK.A) (BRK.B) lifetime, but it never came to fruition. But with over $300 billion in cash, and few options left to buy “sensible prices of businesses that have good underlying economics and are run by honest and able people” at scale, is his prediction finally coming true?
The Details: Warren Buffett, who still serves as Berkshire’s chairman, is often his own biggest critic. He often vastly outperformed the markets, largely to his own surprise. This idea is clearly exemplified at the start of his 1994 annual shareholder letter. “Our gain in net worth during 1994 was $1.45 billion or 13.9%. Over the last 30 years our per-share book value has grown from $19 to $10,083, or at a rate of 23% compounded annually,” Buffett said. He continued, “Charlie Munger, Berkshire's Vice Chairman and my partner, and I make few predictions. One we will confidently offer, however, is that the future performance of Berkshire won't come close to matching the performance of the past.”
