A $250 investment can go a long way. If you had invested this sum in Berkshire Hathaway(NYSE: BRK.A)(NYSE: BRK.B) back in 1980, you'd have more than $500,000 today.
Time travel isn't possible, but what if you had invested in Berkshire stock more recently? Are shares still rising as fast as they did in 1980?
Is Berkshire stock still beating the market?
Berkshire is a lot bigger today than it was in 1980. Back then, its market cap was under $5 billion. Today, the company is worth nearly $900 billion. Getting bigger, naturally, means growth rates have slowed. After all, it's significantly harder to double in size as a $900 billion company than as a $5 billion company.
For the five-year period between 1993 and 1998, for example, Berkshire shares rose in value by 320%. Over the last five years, however, shares have increased in value by only 91.6%. A $250 investment five years ago would be worth only $476 today. That's still better than what the overall market returned, however. Over the last five years, for instance, the S&P 500 index returned 87.5%.
Berkshire stock isn't beating the market by leaps and bounds anymore, but it's still a high-quality business managed by one of the best investors in history, Warren Buffett. Just know that a $250 investment is no longer even possible. The company's B shares -- its cheapest share class -- now trade at around $400. If you can meet that minimum investment, putting the money into Berkshire still makes a ton of long-term sense.
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Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.
