Warren Buffett officially retired as CEO of Berkshire Hathaway at the end of 2025. At the still-sprightly age of 95, after six decades, the “Oracle of Omaha” has hung up his spurs.
There has been a wave of articles revisiting his career and his long-term performance. Most have focused on Berkshire Hathaway as a stock, which is understandable, but also incomplete. Many of Buffett’s most famous stock picks made headlines, yet they were only one part of a much broader business. Berkshire owns railroads, insurance companies, candy brands, and many private businesses that never show up in public markets. Still, the investment portfolio always drew the most attention.
When I began my career, in the mid-1990s, learning how to invest meant something very different than what often passes for investing today. The focus was not on getting rich quickly or trading the hottest idea. It was about understanding how to value businesses and how markets actually work. Required reading included not only The Intelligent Investor by Benjamin Graham, but also all of Buffett’s annual letters, and the many books written about his investment process. Those materials shaped how I still think about markets today.
What remains astonishing is Buffett’s long-term record. From 1965 through 2025, Berkshire Hathaway compounded at roughly 19.8 percent annually. Over that same stretch, the S&P 500 returned about 10.3 percent annually. That difference may not sound dramatic at first glance, but compounding turns small annual gaps into massive outcomes. Over 60 years, Berkshire’s total return exceeded 5,500,000 percent. The S&P 500 delivered roughly 39,000 percent. That is the power of compounding, and it explains why even a one percent difference matters so much over time.
It is also important to note that much of Buffett’s outperformance came earlier in his career. As Berkshire grew larger, the law of large numbers began to work against him. Buffett himself acknowledged that it became increasingly difficult to compound at the same rate once the asset base became enormous. Over the past decade or two, Berkshire’s performance has looked less extraordinary compared to the index, and that is exactly what one would expect. As a portfolio becomes larger and larger, being able to compound at the same annual growth rate becomes more and more difficult.
Buffett spoke often about this difficulty, and spoke freely about his approach to investing. He shared his wisdom all the time, and those who have studied his teachings are better for it.
One of Buffett’s most enduring principles was simple, and important:
“Invest in what you understand and buy it at the right price.”
Look at his largest holdings: Coca-Cola. American Express. Bank of America. Large, dominant businesses with competitive advantages. He understands the brands, the pricing power, and the durability of each business. He bought when the price was right – and when he could not find the right price, he was perfectly content to let cash accumulate and invest it in short-term Treasuries.
At the time of writing, Berkshire holds an unusually large cash position, roughly 30 percent of its total value, with the remainder still invested in highly profitable businesses. Over the past few years, particularly in 2024 and 2025, Berkshire reduced some equity holdings, which led to periods of underperformance relative to the S&P 500. For many investors, having the market outperform your portfolio might feel like failure, but Buffett was never bothered by that.
“If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes” ~ Warren Buffett
Short-term underperformance never mattered to Buffett. The tortoise and the hare analogy fits well. Never drawn to flashy trends, Buffett faced heavy criticism in the late 1990s, during the tech boom when stocks like MSFT did not make it into his portfolio. Many declared that he had lost his touch. Then came the 2000 to 2002 market correction, when the NASDAQ lost roughly 70 percent of its value. Since then, volatility has never disappeared, and Buffett’s discipline has never wavered.
About a decade ago, Apple joined his list of largest holdings, likely because he saw a consumer ecosystem and pricing power he could understand. Perhaps he saw an iPhone in nearly every hand. Even so, Apple remained his primary exposure to technology. Buffet has never chased the most speculative names.
I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years ~ Warren Buffett
I am reminded of a conversation with a small business owner who, knowing I work in investments, proudly told me how he turned $100,000 into $1 million and then rode it back down to $100,000, all by investing in high-profile growth stocks. At one point, his short-term return was higher than that of Berkshire Hathaway over that same period. He wondered out loud whether that made him better than Buffett. I didn’t think he was looking for advice, so I congratulated him.
In short bursts, many investors outperform. Over a few years, especially in a narrow market, it happens all the time. Outperforming for over 60 years, at scale, is something entirely different. You cannot compound at extraordinary rates forever. If you did, you would eventually own the entire market, and prices would collapse due to lack of buyers. Understanding not only the businesses you buy, but also how the markets work is vitally important to investing.
Most investors struggle because they view markets weekly, monthly, or even daily. Markets are emotional in the short term, often disconnected from fundamentals. Buffett understood this and kept dry powder for moments when fear created opportunity. In 2008 and 2009, Berkshire provided capital to firms like Goldman Sachs on extremely favorable terms, earning high interest and equity upside. Those were not lucky trades. They were the result of patience, and focus.
Risk comes from not knowing what you are doing ~ Warren Buffett
As I reflect on his retirement, it is hard not to pay homage to someone who helped shape my approach to investing. Warren Buffett did not mentor me personally, but his philosophy was mentorship to my own approach to investing. It is one of the reasons why I struggle with assets I do not fully understand, such as virtual currencies. I have not been able to reconcile how global monetary systems would relinquish control so easily.
The US dollar, for all its criticism, is backed by the economic power and taxing authority of the United States. The lack of a tie to monetary policy, economic power, and taxing authority leaves me with far too many questions at this point. I could be completely wrong of course; only time will tell. But investing in what I understand, as Buffett has always done, has allowed me to steer Topturn Capital’s portfolios responsibly and sustainably through a variety of once-in-a-lifetime events.
Do not take yearly results too seriously. Instead, focus on four or five-year averages. ~ Warren Buffett
History reinforces this. Over the long term, markets reward patience. Since the end of 2019, markets have compounded near 15 percent annually, despite a pandemic, aggressive rate hikes, and geopolitical shocks. Within that time period, only about 55 percent of trading days have been positive. Even great years include substantial volatility.
Our favourite holding period is forever ~ Warren Buffett
In 2025, four trading days accounted for nearly the entire annual return of the S&P 500. Miss those days, and performance looked dramatically different. The same was true on the downside. Trying to time those moments consistently is unrealistic. Markets do not move in straight lines. That is precisely why staying invested matters.
Over the last century, there have only been 13 years when markets fell more than 10 percent. Each was tied to a major trigger such as recession, geopolitical conflict, or aggressive monetary tightening. Bull markets do not end simply because valuations are high. They end when something breaks.
Today, valuations are elevated, profit margins are at record levels, earnings growth remains strong, and economic indicators globally suggest continued activity. That does not eliminate risk, and it certainly does not guarantee smooth returns. There will be drama. There always is. But fear alone has never been a reliable signal.
So what does this moment represent?
It is a reminder. A reminder of the discipline required to invest well. A reminder that being early is no different from being wrong. A reminder that even Warren Buffett, with 30 percent in cash, remains heavily invested.
Buffett often said that most people would be better off simply buying the S&P 500 and holding it for a long time. Investing is not a game to be won by constant action. True investors buy businesses, or markets, and give them time to work.
At moments like this, it makes sense to hold some dry powder. It does not make sense to abandon the market altogether.
Warren Buffett’s retirement marks the end of an extraordinary career. His greatest lesson may not be the returns themselves, but the temperament behind them. Stay invested. Understand what you own. Be patient. And remember that markets reward discipline far more often than they reward excitement.
“Be fearful when others are greedy, and greedy when others are fearful.”
Warren Buffet
