If I’d invested £500 in Berkshire Hathaway shares 1 year ago, here’s how much I’d have now!

Berkshire Hathaway (NYSE:BRKA) (NYSE:BRKB) shares have come a long way from humble beginnings. Each Berkshire ‘A’ share was worth around $750 in December 1982. Today, investors would have to give up an astonishing $476,000 for one.

But what if I invested just a year ago? Can Warren Buffett – chairman and CEO of Berkshire Hathaway – beat the index?

A good year?

With £500, I probably wouldn’t have been able to afford Berkshire ‘A’ shares a year ago. But I have to buy ‘B’ shares.

Class B shares, first issued in 1996, are more modestly priced and have the lowest share of the company’s equity value.

So, a year ago, I could have just given away two Berkshire B shares for £500. And today, if the two shares would be worth 1.5% more than a year ago.

That’s not a big return. However, the weakening pound will inflate the value of my investment. Today, I have about £560 because the pound is about 10% weaker.

However, this yield is relatively impressive when we consider that S&P 500 – an index that tracks the performance of the stocks of 500 large companies listed on the stock exchange in the US – fell 19% in 12 months.

Is now the time to buy?

There’s only one thing stopping you from buying Berkshire Hathaway stock, and that’s the strength of the dollar. Except for Liz Truss’ time as PM, the pound has never been weaker against the dollar.

The problem is, any gains I made through buying and holding Berkshire Hathaway shares could be wiped out by the appreciating pound.

To some, that might not sound like much right now. But I can’t see things getting worse. The UK’s economic performance has not been strong, but something needs to change.

And exchange rate fluctuations can have a disproportionate impact on investments. For example, the pound is down 20% against the dollar (over 12 months) at its nadir this year. Currencies can fluctuate as wildly as stocks.

But when it comes to Berkshire’s portfolio, who am I commenting on? Buffett is one of the world’s most successful investors, generating huge profits during his five decades at the helm.

But it should be noted that he and vice-chairman Charlie Munger are both in their nineties. He couldn’t run the company much longer. Although, I hope his successors will be successful.

The portfolio actually has a rather limited number of holdings (53) due to its size ($680bn). Only one is a British company. But that’s because Buffett likes to stick to what he knows and only invest in quality companies. This is one of the core principles of a value investing strategy that has done business well.