If you read the Warren Buffett accounting PDF, you will see that Berkshire Hathaway has been making one million percent gains compounded since their inception in 1965. They have made their gains from a variety of different stocks over the years, and they’ve done this through diversifying their investments in different sectors which spread the risk across many investment vehicle asset classes. For example, in 2017 Berkshire Hathaway, the star duo team of Warren Buffett and Charlie Munger have never owned more than 25% in any individual company; The most that they owned last year was 17% in ownership of the American Express company.
The total value of the gains in 2017 was about 60 billion dollars, but half of that was due to a change in tax code from Donald Trump in the new Administration. Even still, 60 billion dollars is nothing to scoff at. According to Warren Buffett and his famous quote, “risk comes from not knowing what you’re doing”. This certainly holds true, because Warren knows exactly what he is doing when he purchased shares of Wells Fargo, Delta Airlines, Bank of America, Southwest Airlines, and Apple last year. As a matter of fact, Warren and Berkshire Hathaway recently purchased 75 million shares of Apple at a time when some are uncertain of future market directions.
The accounting PDF also shows that the average yearly gain is 19.1%, which is much better than if one word to simply invest in the S&P 500 in a general Buy and Hold strategy. The Berkshire Hathaway Warren Buffett method, as seen in their accounting, shows that their method is a little bit more tailored and customized to making large returns.