Stop searching for 'the next Warren Buffett' — The 'Oracle of Omaha' is impossible to copy

Every truthful often, a blistery caller capitalist connected the emergence is crowned "the adjacent Warren Buffett" by the fiscal media, followed swiftly by disappointing show that proves they're nary "Oracle of Omaha." Sam Bankman-Fried, present facing transgression charges, is an utmost case.

But adjacent beyond the disgraced laminitis of of the FTX crypto exchange, others person suffered the curse of being lauded arsenic The Next Buffett. Pershing Square's Bill Ackman, erstwhile Sear's CEO Eddie Lampert, Social Capital's Chamath Palihapitiya were each called "the adjacent Warren Buffett" astatine 1 signifier oregon different of their careers, but nary of their way records comes adjacent to matching the 92-year-old investing legend.

By now, investors tin halt looking. "The adjacent Warren Buffett" remains Warren Buffett alone.

Sui generis

Since taking power of Berkshire Hathaway successful 1965, Buffett has proven himself sui generis — 1 of a kind, unique, successful a people by himself.

What makes Buffett truthful hard to duplicate? His $800 cardinal Berkshire Hathaway conglomerate claims to person doubled the mean yearly instrumentality of the S&P 500 since Buffett led an concern radical that archetypal acquired a bulk of Berkshire backmost successful the LBJ years.

Today, Berkshire owns an unthinkable array of divers businesses, ranging from its crown jewel GEICO security to BNSF Railway, from astir 6% of Apple to 100% of Dairy Queen, with tons much besides. Its equilibrium expanse is unmatched, swelling with astir $150 cardinal successful cash. That makes Buffett, famously a pupil of Columbia University's legendary worth investing prof Ben Graham, the astir venerated capitalist of his, oregon succeeding, generations.

"Berkshire's economical moat is much than conscionable a sum of its parts," said Greggory Warren, Berkshire expert astatine Morningstar. That is due to the fact that of Buffett's occurrence astatine "melding the firm's fiscal spot and underwriting quality with his ain concern acumen," helium said.

Record high

In the midst of the Go-Go banal marketplace of the 1960s, Buffett utilized an concern concern helium ran to bargain what was past a struggling New England textile company. Today, Berkshire is unrecognizable from what it erstwhile was, and much palmy than ever. The banal hit an all-time precocious conscionable this week aft Berkshire posted a grounds operating nett of much than $10 cardinal successful the 3 months ended successful June, boosted by a rebound successful security operations.

The numbers talk for themselves. Berkshire shares person generated a 19.8% annualized summation from 1965 done 2022, doubling the 9.9% instrumentality of the S&P 500. Cumulatively, the banal has gone up 3,787,464% since Buffett took over.

Berkshire vs the S&P 500 implicit the past 5 years.

Whitney Tilson, CEO of Empire Financial Research and a Berkshire shareholder, has been calling Berkshire shares "America's No.1 status stock" for years.

"It offers a unsocial operation of safety, growth, and undervaluation," Tilson said, who has been attending Berkshire's yearly shareholder meetings successful Nebraska for implicit 2 decades. "The banal should beryllium the bedrock of immoderate blimpish portfolio."

Massive currency pile

Buffett has ever focused connected owning ample amounts of cash, comparing it to oxygen — a assets that tin beryllium deployed rapidly erstwhile needed, oregon opportunities contiguous themselves. He has said that ample currency holdings are indispensable arsenic a work to shareholders, due to the fact that Berkshire insures people, and due to the fact that helium likes to clasp his independency during times of turmoil.

"Many, galore radical ... person staked their wellbeing connected the promises of Berkshire to instrumentality attraction of them for, similar I say, 50 years oregon longer into the future," Buffett said during Berkshire's 2020 yearly meeting. "We ever run from a presumption of strength....We don't privation to beryllium babelike connected the kindness of strangers, friends, even, due to the fact that determination are times erstwhile wealth astir stops."

The upland of currency astatine Berkshire has enabled Buffett to enactment accelerated during a crisis. In 2011, Buffett injected $5 cardinal into beleaguered Bank of America successful a large amusement of faith. He famously came to Goldman Sachs' rescue with a $5 cardinal currency infusion aft the illness of Lehman Brothers successful 2008. In 1987, helium saved Salomon Brothers from a hostile takover.

"Berkshire retained and expanded the currency hoard connected its Fort Knox equilibrium sheet, allowing the unsocial quality to instrumentality vantage of opportunities successful immoderate downturn portion virtually eliminating the hazard of ruin," said Bill Stone, main concern serviceman astatine Glenview Trust and a Berkshire shareholder. 

'The GOAT'

Palihapitiya recently expressed his admiration, calling Buffett "the top of each time" aft analyzing his latest stake connected Japan.

The exertion capitalist said the 5 Japanese trading houses Buffett invested successful are bully investments due to the fact that they wage unchangeable dividends and boost their earnings, at the aforesaid clip arsenic Buffett was capable to hedge currency hazard by selling Japanese debt, pocketing the quality betwixt dividends collected connected the investments and enslaved coupon payments Berkshire pays out.

"It's inspiring to spot folks enactment this intelligently astatine scale," said Palihapitiya who, astatine his peak, erstwhile compared his ain instrumentality with Berkshire's.

Many Buffett watchers person marveled astatine the investor's pivot to investing successful Apple, which has ballooned to a $177 cardinal bet, the azygous largest holding successful Berkshire's equity portfolio.

Although Buffett has famously avoided tech stocks, and Apple is acold from Buffett's tract of expertise and comfortableness level, helium likens the iPhone shaper to a user products institution and has said helium is besides attracted to its large buyback programs. Apple authorized the repurchase of arsenic overmuch arsenic $90 cardinal of communal banal successful some 2022 and again successful 2023.

Buffett's Apple stake has made Berkshire good implicit $100 cardinal since 2016.

The adjacent "Oracle of Omaha," whoever it is, tin lone imagination of duplicating that performance.