All the 7s..16 Nov 2019 06:46
A (hi)story. Since 1942 c.77 years ago when WB was 11 years old he invested $114 of his 6 years hard earned into 3 shares of Cities Service preferred stock, his first foray into capitalism. He sold too early albeit at a small profit.
From such humble beginnings in Omaha Nebraska not the heady heights of Wall St did America's pre-eminent capitalist begin his meteoric financial career.
During the (2) 77yr periods prior to 1942 the US had grown to c.4m people about half a % of the world's pop and without a doubt the most powerful country on earth.
Despite the alarming 1942 headlines the US came out of World War 2 in good economic health and the Nation expected a post war boom for employment and a better life. A belief that was well founded.
The following 77 years have been breathtaking.
If WB had put his $114 savings into a no fee S&P 500 index fund (div reinvested) his stake would be worth $607,000 today, a gain of 5 to 1.
However a $1 million mrkt investment by an ii at that time would have grown to c.$5.3bn.
It's worth noting that had said ii paid 1% of assets to various helpers, invstmnt managers & consultants the gain would have been cut in half. That's what happens over 77 years when the c.12% annual return achieved by the 500 is recalculated at 10.8%.
Had WB decided to buy $114 worth of Gold that's c.3.5 ounces at that time to protect himself against defecits and a worthless currency his stake would be worth about $4200 today. The 'magic' metal no match for US 'mettle'.
America's almost unbelievable prosperity 5 has been gained despite viral inflation, a 20% prime rate, costly wars, collapse in home values, financial panics, recessions and grew stronger from every set back.
It's unimaginable what America has accomplished in just 3 seventy-seven year lifetimes. The Fed estimates US household wealth at $108 trillion an amount impossible to comprehend. Much of this success has been a product of what WB calls the American Tailwind an unstoppable momentum.
I guess the moral of the story is don't back against Uncle Sam during the next 77 years for no country on earth has been able to match America's otherworldly progress.
WB Chairman of the Board certainly won't be doing so.
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