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Berkshire Hathaway stock soared 396,182% in the decades after Charlie Munger joined the company in 1978

Warren Buffett and Charlie Munger
Warren Buffett and Charlie MungerGetty Images
  • Berkshire Hathaway Vice Chairman Charlie Munger passed away on Tuesday at the age of 99.

  • Berkshire Hathaway stock has soared nearly 400,000% since Munger joined the firm in 1978.

  • $100 invested in Berkshire Hathaway in 1978 has turned into $396,282, according to Bespoke.

Charlie Munger died on Tuesday at the age of 99, and among the reflections of his passing is just how astounding of an investor he was.

Munger's investing prowess is on full display in the share performance of Berkshire Hathaway. Munger joined the conglomerate in 1978 and served as its Vice Chairman for 46 years.

Shares of Berkshire Hathaway soared 396,182% from 1978 through 2023, according to Bespoke. That means $100 invested in Berkshire Hathaway in 1978 is worth $396,282 today. Those massive gains dwarf the performance of the S&P 500 over the same time period, which appreciated 16,427%.

Berkshire Hathaway

What is impressive is just how consistent the outperformance of Berkshire Hathaway has been over the past few decades.

"In 31 of the 46 years that Munger was at the company, Berkshire Hathaway outperformed the S&P 500. More importantly, though, in the fifteen years that Berkshire underperformed the S&P 500, the average underperformance was 13.2 percentage points, whereas in the 31 years that Berkshire outperformed the S&P 500, the average margin of outperformance was 20.9 percentage points," Bespoke said.

"So not only did Berkshire outperform the S&P 500 more than twice as often as it underperformed, but when it did outperform, the gap was much wider than when it underperformed," Bespoke added.

Munger was the right hand to Buffett, and Buffett attributed a lot of Berkshire Hathaway's success to Munger.

"Berkshire Hathaway could not have been built to its present status without Charlie's inspiration, wisdom and participation," Buffett said in a statement on Tuesday.

Buffett credits Munger with convincing him to pay up for high quality stocks, rather than focusing on "so-so" companies at a cheap price.

"I would say that every time I'm with Charlie, I got at least some new slant on an idea that causes me to rethink certain things," Buffett once told CNBC in an interview.

"It's not that much fun to buy a business where you really hope this sucker liquidates before it goes broke," Munger said at Berkshire Hathaway's 1998 shareholders meeting.

It's that thinking that has guided Berkshire Hathaway into becoming one of the most successful investment partnerships of all time.

Read the original article on Business Insider