From the desk of the CIO: Warren Buffett’s legacy
Morningstar’s Matt Wacher opines on the oracle of Omaha.
At the annual Berkshire Hathaway shareholder meeting on 3 May 2025, Warren Buffett announced he’ll step down as CEO at the end of the year.
The investment world rarely agrees on anything. But with Buffett, there’s little debate: he’s one of the greatest investors of all time—if not the greatest.
At Morningstar Investment Management we leverage Warren Buffet’s investment wisdom in our investment process every day. Our at-times contrarian approach is underpinned by the Buffett adage: “be fearful when others are greedy and greedy when other are fearful.”
We saw this play out yet again as markets sank on ‘liberation day’ as a result of sky-high tariffs, only to bounce back as investors refocused on the long term and tariffs were paused.
Likewise, our long-term approach is founded on patience, and it is a message that we often talk to our clients about. As Buffett says: “The stock market is designed to transfer money from the active to the patient.”
Others have posted flashier short-term returns. But no one has matched his consistency, discipline, and long-term performance across nearly six decades.
The reason we pay so much adherence to Buffett’s approach and thinking is because since Buffett took control of Berkshire in 1965, the company has returned more than five million percent. The S&P 500 returned 39,000% over that same period—a strong number on its own, but it looks like an ant hill next to the Everest-sized mountain Buffett built.
A few years ago, investor Chris Bloomstran offered a jaw-dropping statistic: Berkshire could fall 99% in value and still have outperformed the S&P 500 during Buffett’s tenure.
When Bloomstran shared this with Buffett, he responded: “Ben Graham would be proud. But let’s not test the math.”
Humility is another trait of all great investors and Buffett has it in spades. According to Bloomstran’s estimates, Buffett paid under $11 per share for Berkshire in 1965. Today, the company earns $11 per share every 2.5 hours.
With his departure, all eyes now turn to the future of Berkshire. The stock dropped 4% on the first trading day after the announcement—a modest decline, all things considered.
When one of the greatest CEOs ever steps aside, you might expect a steeper decline. But perhaps that’s the ultimate testament to what Buffett built: something designed to endure.
His longtime partner, Charlie Munger, passed away two years ago, and Berkshire has continued its ascent—hitting record highs and surpassing a $1 trillion market cap for the first time.
Morningstar analyst Greggory Warren—who covers Berkshire—noted in a recent report that it’s important to ask tough questions about what comes next. When a world-class leader steps aside, it naturally raises uncertainty about the company’s future.
Still, there’s good reason to believe Berkshire’s wheels won’t come off.
Succession planning has long been in motion. Todd Combs and Ted Weschler have managed investment portfolios with increasing responsibility. Ajit Jain oversees the insurance business. And Greg Abel—Buffett’s chosen successor—has already been onstage at shareholder meetings and is well-supported to lead the entire company.
Buffett announced his exit with Berkshire at all-time highs, a balance sheet with nearly $350 billion in cash, and arguably stronger than ever.
There are countless lessons from Buffett’s career, but one stands out: a well-defined investment philosophy, executed with discipline over decades, can be incredibly hard to beat. And it applies just as well to multi-asset portfolios as it does to individual stocks.
So while I can’t promise five-million-percent return over 60 years, our clients know that the timeless investment wisdom Buffett shared with investors along his journey underpins our investment philosophy—and ultimately, the way their money is invested.
