When it comes to investing, few people have come close to generating the consistently market-beating returns of Warren Buffett. While it hasn’t been a winner every year, the shares of his investment firm Berkshire Hathaway (NYSE:BRK.B) have produced a 19.9% annualised return since 1965 versus the S&P 500’s 10.4%.
That means, anyone who invested £20,000 with Buffett 60 years ago now has a staggering £2.8bn! By comparison, index investors have only earned £9.9m. That’s obviously still an impressive pile of wealth. Yet it’s nothing compared to Buffett’s success.
So, for those who are only just starting their investing journeys in 2025, does Berkshire Hathaway continue to make sense as a market-beating investment?
What’s happening in 2025?
Buffett has continued to lead Berkshire Hathaway in 2025. And since the start of the year, shareholders have continued to reap double-digit gains, climbing by around 12% even after tariff-related uncertainty put downward pressure on the stock price. In other words, anyone who invested £20,000 with Buffett at the start of the year now has roughly £22,400.
That’s just enough to continue being a market beater with the total return from the S&P 500 over the same period coming in at 11%. And with US interest rate cuts potentially emerging later this month, valuations could soon be climbing higher, allowing shareholders to reap even larger returns.
However, the tariff situation still has Buffett concerned. So far this year, Berkshire Hathaway has been a net seller, citing the high valuations of US stocks. As such, while rate cuts might give a temporary boost, it seems Buffett is betting on a downward correction on the horizon.
But with over $340bn of cash sitting on the balance sheet, he’s also got an enormous pile of dry powder available to take advantage of any bargains that might emerge from the suspected volatility. And given his track record, following in Buffett’s footsteps directly or indirectly through owning Berkshire shares could be a prudent move.
Nothing lasts forever
Warren Buffett has made a lot of investors exceptionally wealthy. However, his direct impact will soon be over as the Oracle of Omaha plans to retire later this year. The leadership of Berkshire Hathaway will fall to his hand-picked successor, Greg Abel. And while Abel appears to be well-suited, he will still have enormous shoes to fill.
Beyond succession risk, it’s also important to highlight that Berkshire’s investment portfolio is highly concentrated. Over 50% of all invested capital is allocated to Apple, American Express, and Bank of America. So, should any of these businesses run into trouble due to the ongoing geopolitical and economic uncertainty, Berkshire’s investment portfolio could suffer greatly, leaving investors disappointed.
The bottom line
Despite the market uncertainty, Buffett’s team, including Greg Abel, have already demonstrated a knack for navigating choppy markets over the years.
While the investment portfolio is concentrated, it still grants investors indirect exposure to a wide range of industries and international markets. And even with Buffett stepping down later this year, investors could still continue to benefit from his strategy under the stewardship of new leadership.
That’s why I think Berkshire Hathaway shares are still worth considering in 2025.
