That is the story for Berkshire Hathaway as an investment vehicle with Buffett at the helm. If $100 had been invested in Berkshire Hathaway in 1964, the first year of Buffett's stewardship, it would now be worth about $587,000. The same amount put into an index fund for the S&P 500 would have around $7500.00 in value, at present. The beta for Berkshire Hathaway is 0.55.
It's not just stocks such as those found in portfolio of Berkshire Hathaway, either. Buffett has never been a big fan of high tech companies. But anyone would have to appreciate Apple's (AAPL) 10-year return of well over 4,000%. Over the same period, it has been around 70% for the Dow Jones Industrial Average. The beta for Apple is 0.84. The dividend yield of 2.19% for Apple also tops the average for a member of the DJIA.
Beta should definitely play a role in the due diligence of an investor considering which stocks to buy. A low beta and a high dividend yield can be a rewarding combination.
At the time of publication, the author had no position in any of the stocks mentioned.This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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