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Taking a look at Berkshire Hathaway’s 2007 Annual Report, we see in page 2 that Warren Buffett has managed to grow Berkshire’s Book Value Per Share by an annual compound rate of 21.1% from 1964 to 2007.

Doesn’t sound too impressive to you? Well think twice…

21.1% per annum compound means that if you had invested just one dollar in 1964, your buck would have grown to $4553 by 2007! Page 3 of the Annual Report says:

“Over the last 43 years (that is, since present management took over) book value has grown from $19 to $78,008″

(By the way, the 21.1% is after tax!)

So now you can see why Warren Buffett is easily the Richest Man in the World.

Still think it is realistic to target 30% return per month on Bursa Malaysia?

In fact I say that it is nearly impossible for anyone to repeat what Buffett has achieved. One thing to note is that Berkshire has achieved its growth not just from stock market investments but in buying controlling stakes in many businesses. This makes him different from other money managers… and also different from other business owners. His unique approach makes him both an outstanding fund manager and business owner at the same time.

Look at Berkshire’s Balance Sheet as at 31 December 2007 and you will see that Equity Securities amount to US$75 billion or just 27% of Berkshire’s total assets of US$273.2 billion.

The rest of the assets comprise fixed income investments and the businesses which Buffett has acquired over the years. These are businesses in industries which include utilities, energy, retailing, manufacturing and services.

This means that the value of much of Berkshire’s assets is not subject to stock market vagaries. As long as his businesses are performing, Berkshire will do well no matter what the stockmarket does.

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Source: Berkshire Hathaway Inc - 2007 Annual Report