Buffett’s Argument For Index Funds

“This is a great argument for index funds.” –Warren Buffett


Buffett held the annual meeting for his company, Berkshire Hathaway, virtually over this past weekend. Buffett’s usually good for dispensing some of his investment wisdom to the masses during these events. This year was no exception.

To kick thing’s off, Buffett shared a screen showing the 20 largest companies in the world by market capitalization as of 3/31/2021. Then he wanted the viewers to guess how many of those companies would still on this list 30 years from now.

Next, he pulled up a screen showing the 20 largest companies from 1989. None of the 20 from 30 years ago are on the present list. None…Zero.

Buffett did this to show how difficult it is to pick winners in the stock market and also the basis for the above quote.

Here’s a video (15 minutes) from the actual meeting if you want to check it out. Buffett to new investors: ‘It’s not as easy as it sounds’