One of the world’s richest persons, Warren Buffett is known as a legendary wealthmaker. Buffett, who founded Berkshire Hathaway, has amassed one of the biggest fortunes on the planet. His current net worth stands at $106 billion (over Rs 8.7 lakh crore). The man recently shared a valuable lesson that can be imbibed by all investors around the globe.
Buffett revealed how he made mind-boggling profits with just two bets on the stock market. Buffett had invested $1.3 billion (around Rs 10,000 crore) each in the famous drink brand Coca Cola and the financial giant American Express. Those investments are now worth $47 billion (over Rs 37,000) crore. Buffett said that growth occurred every year with the investments and was “as certain as birthdays.
Buffett and his partner Charlie Munger had made a total share purchase of $1.3 billion in Coke in 1994 and Amex in 1995. The bets worked wonders over the years. They received a cash dividend of $75 million in 1994. This grew to $704 million in 2022. With American Express, dividends grew from $41 million to $302 million by 2022.
Buffett said that while these investments were “far from spectacular” but brought “important gains in stock prices”. Compared to his profits in the two stocks, such an investment in a 30-year bond, it would have meant “unchanged $80 million” in annual income. While the two bets now form 5% of Berkshire’s assets, a misguided bond investment would have meant just 0.3% of his net worth would be from that month. In short, Buffett’s lesson is that one doesn’t need too many investments to grow and “just a few winners” can “work wonders”. Living long into your 90s also helps, he added.
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