{"id":12102,"date":"2023-01-31T23:56:00","date_gmt":"2023-01-31T15:56:00","guid":{"rendered":"https:\/\/www.granitefirm.com\/blog\/us\/?p=12102"},"modified":"2025-01-22T18:15:24","modified_gmt":"2025-01-22T10:15:24","slug":"buffett-return-rate","status":"publish","type":"post","link":"https:\/\/www.granitefirm.com\/blog\/us\/2023\/01\/31\/buffett-return-rate\/","title":{"rendered":"Return rate comparison among Buffett portfolio, Berkshire stock price, S&#038;P 500 over the years"},"content":{"rendered":"\n<p>Let me remind everyone that the conclusion of this article is very important.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #ffffff;color:#ffffff\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #ffffff;color:#ffffff\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/01\/31\/buffett-return-rate\/#Investors_need_to_know_the_difference\" >Investors need to know the difference<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/01\/31\/buffett-return-rate\/#Buffetts_algorithm\" >Buffett&#8217;s algorithm<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/01\/31\/buffett-return-rate\/#What_else_do_investors_need\" >What else do investors need?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/01\/31\/buffett-return-rate\/#Closing_words\" >Closing words<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/01\/31\/buffett-return-rate\/#Related_articles\" >Related articles<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Investors_need_to_know_the_difference\"><\/span>Investors need to know the difference<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>This article is to look at Buffett portfoion return rate from another perspective. Many people who have studied U.S. stocks or Buffett in depth must have a question in their mind for a long time (if you don&#8217;t have this question, you had better figure it out) \u2500\u2500\u2500\u2500 the returns of Buffett&#8217;s investment portfolio, Berkshire stock price, S&amp;P 500, the difference among these three over the years.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Buffetts_algorithm\"><\/span>Buffett&#8217;s algorithm<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Buffett disclose his return on investment every year at the beginning of his <a href=\"https:\/\/berkshirehathaway.com\/letters\/2021ltr.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">annual Berkshire shareholders letter<\/a>, but in fact you need to know somthing there:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The return on investment he reports is the market price per share of Berkshire, which is the fourth column of the table below, not the return on investment of Berkshire&#8217;s stock portfolio, which makes a big difference. Because Berkshire&#8217;s investment portfolio currently only accounts for about 1\/3 of Berkshire&#8217;s entire company assets.<\/li>\n\n\n\n<li>He reported annual returns of the S&amp;P 500 include dividends, which is the third column of the table below.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_else_do_investors_need\"><\/span>What else do investors need?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>I believe many investors want to know what the annual return on investment of Buffett&#8217;s Berkshire stock portfolio is. That is exactly the purpose of this article. I sorted it out and listed the table below.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Year<\/td><td>Buffett&#8217;s stock portfolio<\/td><td>S&amp;P 500 index<\/td><td>Berkshire market value per share<\/td><\/tr><tr><td>1965<\/td><td>0.00%<\/td><td>10.00%<\/td><td>49.50%<\/td><\/tr><tr><td>1966<\/td><td>0.00%<\/td><td>-11.70%<\/td><td>-3.40%<\/td><\/tr><tr><td>1967<\/td><td>0.00%<\/td><td>30.90%<\/td><td>13.30%<\/td><\/tr><tr><td>1968<\/td><td>0.00%<\/td><td>11.00%<\/td><td>77.80%<\/td><\/tr><tr><td>1969<\/td><td>0.00%<\/td><td>-8.40%<\/td><td>19.40%<\/td><\/tr><tr><td>1970<\/td><td>0.00%<\/td><td>3.90%<\/td><td>-4.60%<\/td><\/tr><tr><td>1971<\/td><td>0.00%<\/td><td>14.60%<\/td><td>80.50%<\/td><\/tr><tr><td>1972<\/td><td>0.00%<\/td><td>18.90%<\/td><td>8.10%<\/td><\/tr><tr><td>1973<\/td><td>0.00%<\/td><td>-14.80%<\/td><td>-2.50%<\/td><\/tr><tr><td>1974<\/td><td>0.00%<\/td><td>-26.40%<\/td><td>-48.70%<\/td><\/tr><tr><td>1975<\/td><td>0.00%<\/td><td>37.20%<\/td><td>2.50%<\/td><\/tr><tr><td>1976<\/td><td>0.00%<\/td><td>23.60%<\/td><td>129.30%<\/td><\/tr><tr><td>1977<\/td><td>-6.77%<\/td><td>-7.40%<\/td><td>46.80%<\/td><\/tr><tr><td>1978<\/td><td>5.62%<\/td><td>6.40%<\/td><td>14.50%<\/td><\/tr><tr><td>1979<\/td><td>17.05%<\/td><td>18.20%<\/td><td>102.50%<\/td><\/tr><tr><td>1980<\/td><td>29.60%<\/td><td>32.30%<\/td><td>32.80%<\/td><\/tr><tr><td>1981<\/td><td>-3.26%<\/td><td>-5.00%<\/td><td>31.80%<\/td><\/tr><tr><td>1982<\/td><td>21.09%<\/td><td>21.40%<\/td><td>38.40%<\/td><\/tr><tr><td>1983<\/td><td>19.96%<\/td><td>22.40%<\/td><td>69.00%<\/td><\/tr><tr><td>1984<\/td><td>6.99%<\/td><td>6.10%<\/td><td>-2.70%<\/td><\/tr><tr><td>1985<\/td><td>29.49%<\/td><td>31.60%<\/td><td>93.70%<\/td><\/tr><tr><td>1986<\/td><td>17.29%<\/td><td>18.60%<\/td><td>14.20%<\/td><\/tr><tr><td>1987<\/td><td>4.71%<\/td><td>5.10%<\/td><td>4.60%<\/td><\/tr><tr><td>1988<\/td><td>15.17%<\/td><td>16.60%<\/td><td>59.30%<\/td><\/tr><tr><td>1989<\/td><td>29.38%<\/td><td>31.70%<\/td><td>84.60%<\/td><\/tr><tr><td>1990<\/td><td>-2.00%<\/td><td>-3.10%<\/td><td>-23.10%<\/td><\/tr><tr><td>1991<\/td><td>28.35%<\/td><td>30.50%<\/td><td>35.60%<\/td><\/tr><tr><td>1992<\/td><td>7.36%<\/td><td>7.60%<\/td><td>29.80%<\/td><\/tr><tr><td>1993<\/td><td>9.53%<\/td><td>10.10%<\/td><td>38.90%<\/td><\/tr><tr><td>1994<\/td><td>1.01%<\/td><td>1.30%<\/td><td>25.00%<\/td><\/tr><tr><td>1995<\/td><td>34.91%<\/td><td>37.60%<\/td><td>57.40%<\/td><\/tr><tr><td>1996<\/td><td>21.03%<\/td><td>23.00%<\/td><td>6.20%<\/td><\/tr><tr><td>1997<\/td><td>30.52%<\/td><td>33.40%<\/td><td>34.90%<\/td><\/tr><tr><td>1998<\/td><td>26.49%<\/td><td>28.60%<\/td><td>52.20%<\/td><\/tr><tr><td>1999<\/td><td>19.15%<\/td><td>21.00%<\/td><td>-19.90%<\/td><\/tr><tr><td>2000<\/td><td>-7.27%<\/td><td>-9.10%<\/td><td>26.60%<\/td><\/tr><tr><td>2001<\/td><td>-10.04%<\/td><td>-11.90%<\/td><td>6.50%<\/td><\/tr><tr><td>2002<\/td><td>-19.13%<\/td><td>-22.10%<\/td><td>-3.80%<\/td><\/tr><tr><td>2003<\/td><td>25.87%<\/td><td>28.70%<\/td><td>15.80%<\/td><\/tr><tr><td>2004<\/td><td>9.73%<\/td><td>10.90%<\/td><td>4.30%<\/td><\/tr><tr><td>2005<\/td><td>5.58%<\/td><td>4.90%<\/td><td>0.80%<\/td><\/tr><tr><td>2006<\/td><td>14.32%<\/td><td>15.80%<\/td><td>24.10%<\/td><\/tr><tr><td>2007<\/td><td>6.30%<\/td><td>5.50%<\/td><td>28.70%<\/td><\/tr><tr><td>2008<\/td><td>-32.35%<\/td><td>-37.00%<\/td><td>-31.80%<\/td><\/tr><tr><td>2009<\/td><td>24.66%<\/td><td>26.50%<\/td><td>2.70%<\/td><\/tr><tr><td>2010<\/td><td>14.55%<\/td><td>15.10%<\/td><td>21.40%<\/td><\/tr><tr><td>2011<\/td><td>1.43%<\/td><td>2.10%<\/td><td>-4.70%<\/td><\/tr><tr><td>2012<\/td><td>14.59%<\/td><td>16.00%<\/td><td>16.80%<\/td><\/tr><tr><td>2013<\/td><td>29.44%<\/td><td>32.40%<\/td><td>32.70%<\/td><\/tr><tr><td>2014<\/td><td>12.08%<\/td><td>13.70%<\/td><td>27.00%<\/td><\/tr><tr><td>2015<\/td><td>0.96%<\/td><td>1.40%<\/td><td>-12.50%<\/td><\/tr><tr><td>2016<\/td><td>10.69%<\/td><td>12.00%<\/td><td>23.40%<\/td><\/tr><tr><td>2017<\/td><td>19.83%<\/td><td>21.80%<\/td><td>21.90%<\/td><\/tr><tr><td>2018<\/td><td>-3.84%<\/td><td>-4.40%<\/td><td>2.80%<\/td><\/tr><tr><td>2019<\/td><td>28.46%<\/td><td>31.50%<\/td><td>11.00%<\/td><\/tr><tr><td>2020<\/td><td>19.19%<\/td><td>18.40%<\/td><td>2.40%<\/td><\/tr><tr><td>2021<\/td><td>24.59%<\/td><td>28.70%<\/td><td>29.60%<\/td><\/tr><tr><td><strong>2022 as of today<\/strong><\/td><td><strong>-19.61%<\/strong><\/td><td><strong>-19.46%<\/strong><\/td><td><strong>-7.90%<\/strong><\/td><\/tr><tr><td>\u3000<\/td><td>\u3000<\/td><td>\u3000<\/td><td>\u3000<\/td><\/tr><tr><td>IRR (annual rate of return)<\/td><td><strong>11.27%<\/strong><\/td><td><strong>10.50%<\/strong><\/td><td><strong>20.10%<\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"alignleft size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"182\" height=\"176\" src=\"https:\/\/www.granitefirm.com\/blog\/us\/wp-content\/uploads\/sites\/2\/2022\/07\/USA-Today.jpg\" alt=\"Buffett portfoion Return rate\" class=\"wp-image-12113\"\/><figcaption class=\"wp-element-caption\">Credit: USA Today<\/figcaption><\/figure><\/div>\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Closing_words\"><\/span>Closing words<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>From the table I compiled above, we can know that by the end of 2021:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The annualized return on investment of Buffett&#8217;s portfolio is 11.27%, and I believe this is the number that many investors want to know.<\/li>\n\n\n\n<li>Berkshire&#8217;s share price has an annualized return rate of 20.1%, and that&#8217;s the number you see on the media.<\/li>\n\n\n\n<li>The annualized return on investment for the S&amp;P 500 is 10.5%, and that&#8217;s a figure that includes dividends.<\/li>\n<\/ul>\n\n\n\n<p><strong>After writing this article, I am even more convinced that &#8220;starting a business can make far more money than investing in stocks&#8221;. Please read my sentence carefully, because the annualized return rate of the former is 20.1%, and the latter is 11.27%.<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Related_articles\"><\/span>Related articles<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/04\/27\/buffett-portfolio\/\" target=\"_blank\" rel=\"noreferrer noopener\">The commonalities of Buffett portfolio \u2013 cheap, fixed income, repurchase<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/11\/17\/global-stock-markets\/\">Global stock markets performance comparision over the past 30 years in a table<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/04\/07\/buffett-deserves-study\/\" target=\"_blank\" rel=\"noreferrer noopener\">Why Buffett deserves further study?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/12\/07\/buffett-investment-idea\/\">What helps Buffett to get his investment idea?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/06\/17\/wells-fargo\/\">Wells Fargo, a major holding once praised by Buffett and Munger<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/01\/02\/sp-500-next-year-return\/\">S&amp;P 500 index next year performance, based on last century record<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/01\/31\/buffett-return-rate\/\">Return rate comparison among Buffett portfolio, Berkshire stock price, S&amp;P 500 over the years<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2023\/01\/08\/2022-sp-500-constitutent-stock-performance\/\">2022 S&amp;P 500 Constitutent Stocks Performance<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/12\/29\/procter-gamble-pg\/\">Stocks Better than the S&amp;P 500, Procter &amp; Gamble (P&amp;G) <\/a><\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/10\/23\/sp-500-vs-nasdaq-100-index\/\" target=\"_blank\" rel=\"noreferrer noopener\">S&amp;P 500 vs. Nasdaq 100 index, how to choose a market index?<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/07\/25\/stock-worth-holding-forever\/\" target=\"_blank\" rel=\"noreferrer noopener\">S&amp;P 500 index, the only stock worth holding forever<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/09\/11\/sp-500-index-querier\/\" target=\"_blank\" rel=\"noreferrer noopener\">Querier to Annualized rate of return for S&amp;P 500 Index<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/10\/31\/14481\/\">S&amp;P 500 P\/E ratio has been rising in the past century, S&amp;P 500 PE Ratio and Average Querier<\/a>&#8220;<\/li>\n\n\n\n<li>&#8220;<a href=\"https:\/\/www.granitefirm.com\/blog\/us\/2022\/08\/11\/a-table-comparing-index\/\" target=\"_blank\" rel=\"noreferrer noopener\">A table comparing S&amp;P 500, Nasdaq, Dow Jones, Philadelphia Semiconductor Index over the years since its inception and annualized returns<\/a>&#8220;<\/li>\n<\/ul>\n\n\n\n<p><em><strong>Disclaimer<\/strong><\/em><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><em>The content of this site is the author\u2019s personal opinions and is for reference only. I am not responsible for the correctness, opinions, and immediacy of the content and information of the article. Readers must make their own judgments.<\/em><\/li>\n\n\n\n<li><em>I shall not be liable for any damages or other legal liabilities for the direct or indirect losses caused by the readers&#8217; direct or indirect reliance on and reference to the information on this site, or all the responsibilities arising therefrom, as a result of any investment behavior.<\/em><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>This article is to look at Buffett portfoion return rate from another perspective. Many people who have studied U.S. stocks or Buffett in depth must have a question in their mind for a long time (if you don&#8217;t have this question, you had better figure it out) <\/p>\n","protected":false},"author":1,"featured_media":12113,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11,1424],"tags":[48,49],"class_list":["post-12102","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buffett","category-historical-statistic","tag-brk-a","tag-brk-b"],"_links":{"self":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/12102","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/comments?post=12102"}],"version-history":[{"count":17,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/12102\/revisions"}],"predecessor-version":[{"id":22322,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/posts\/12102\/revisions\/22322"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media\/12113"}],"wp:attachment":[{"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/media?parent=12102"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/categories?post=12102"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.granitefirm.com\/blog\/us\/wp-json\/wp\/v2\/tags?post=12102"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}