Best Investor – Allan Gray or Warren Buffet?
Looking at a report done after the last AGM of Bershire Hathaway and the performance of Allan Gray versus Warren Buffet. Who is the best investor?
Who is the best investor?
The Berkshire Hathaway AGM, was held in Omaha, Nebraska, last month, and it is the talk of the town amongst all involved in investments.
Kokkie Kooyman, possibly the biggest Buffett-fan in South Africa, attended this AGM 15 times as it is the investment Woodstock of the world. He compiled a report on behalf of Nedgroup Investment managers which contained the usual adoration for Warren Buffet and Charlie Munger, the two senior managers of Berkshire Hathaway.
Kooyman describes the amount of wealth created by Buffett and Munger to their shareholders. The book value of Berkshire Hathaway grows at an annual rate of 97% versus the S&P 500 index growing annually at 9.8%, since 1965. Just to explain, an amount of $1 million invested in 1965 would be worth $5.6 billion today, compared with only $89 million for an investment in the S&P500 index.
Best investor – Comparisons
Kooyman made comparisons of these returns to other investments available to local investors, including an investment in the Rembrandt Group of companies, PSG and also Allan Gray through Orbis Investment Management.
Allan Gray responded with performance figures of the Orbis Global Equity Fund, a fund originally managed by Allan Gray himself and now his son William, following the same investment beliefs.
A comparison of returns on a $10 000 investment in the Berkshire Hathaway and the Orbis Global Equity Fund in January 1990 to April this year, reveals a very close parallel in returns over this period, with Berkshire slightly ahead with an investment amount of $221 619 versus $182 057.
When the returns of the past 14 years are compared, Berkshire clearly under performs. In fact, when compared with the Orbis Global Equity Fund you have to question why anyone would recommend Berkshire Hathaway over the Orbis fund.
Best investor – Contrasts
A blatant contrast between the two individuals :
Warren Buffett – (83) is the jovial showman of the investment world
Allan Gray – (76) is secretive, mysterious and almost invisible to the public eye. He rarely awards interviews and photographs. He is reported to be South Africa’s richest man.
The investment returns in the Orbis fund don’t match that of the renowned Buffett since commencement -it beats him hands-down over the last 14 years!
Paul Merriman, one of the most respected writers on financial matters in the US, asks the following: “Buffett is smart, generous, industrious, famous and known for integrity. But is he really the world’s best investor?”
This article was Originally posted on Dial Direct and reposted with permission.