Stephen Gandel of Fortune.com has compiled a list of Warren Buffett’s 6 best investments of all time
(i) PetroChina
CAGR: 52%
Total returns: 720%
Years held: 5
Warren Buffett bought 1.3% of PetroChina (China’s dominant oil company) for $488 million in 2002 and 2003. At the time, PetroChina had a market cap of $37 billion. Buffett believed it was worth $100 billion. Rising oil prices and new discoveries caused PetroChina’s shares to soar. By the time Berkshire sold in 2007, PetroChina’s market cap had reached $275 billion, and Berkshire reaped a $3.6 billion gain.
(ii) BYD
CAGR: 41%
Total Returns: 671%
Years held: 6
Warren Buffett bought a 10% stake in BYD, a Chinese car battery company, in late 2008, for $230 million. Six years later, the 10% stake in BYD is now worth nearly $1.8 billion.
(iii) Freddie Mac
CAGR: 24%
Total returns: 1,525%
Years held: 13
Warren Buffett invested $108 million in Freddie Mac, the giant government-backed mortgage insurance firm, at a split-adjusted $4 a share. Ten years later, Freddie Mac’s shares traded at $70.
Warren Buffett sold his investment in Freddie in 2000 on the basis that he was not comfortable with Freddie Mac’s strategy of striving for double-digit returns. In 2003, news came out that Freddie Mac had regularly misreported its earnings. Freddie Mac now trade at just over $2.
(iv) Berkshire Hathaway
CAGR: 22%
Total return: 1,745,300%
Years held: 49
When Buffett bought Berkshire Hathaway in 1965 for about $12 a share, it was a textile company and one of the largest employers in New Bedford, Mass. He has used it as an investment company to buy other companies such as Nebraska Furniture Mart, See’s Candies, Oriental Trading, Dairy Queen, Fruit of the Loom, Burlington Northern and Heinz. Berkeshire now ranks fourth on the Fortune 500 and now has a stock price of $210,000.
(v) Wells Fargo
CAGR: 21%
Total returns: 9,417%
Years held: 24
Buffett invested $290 million investment in Wells Fargo in 1990. At that time, Bank stocks were being battered by the savings and loan crisis and Buffett characteristically took advantage of the market turmoil to buy into one of the highest quality banks he could find. In 1990, Wells Fargo had a market capitalization of $2.9 billion. It is now worth $275 billion.
Warren is undoubtedly best investor in the world. However above CAGR are not the best – one can clearly see this. Even most of the high quality business in India have delivered higher return during bull runs.
The big question is what are the reasons why Warren avoid investing in India, even in current situation where most of global investors are talking about Indian economy prospects.
India is a developing country so here you can see high growth in some companies. India is less preferred / given high risk due to political condition, bad management/corruption etc.