By Andrew Bary 

Warren Buffett, at 91, presided last week over Berkshire Hathaway's annual meeting, a gathering popularly known as "Woodstock for Capitalists." If you're undecided about whether Buffett deserves his reputation as one of history's greatest investors, consider this amazing statistic: Given the gains in Berkshire Hathaway Class A shares since he took over in 1965, the stock could drop 99% and still beat the S&P 500 index.

Barron's calculates that $Berkshire Hathaway-A(BRK.A.US)$ shares would have had to return 10.3% annually since 1965 for a price of $4,968 -- 1% of the stock's recent close at $496,800. That return compares with a 10.2% annualized return for the S&P 500 over the same period. The 1965 starting price for Berkshire shares was $20. Class A is the original stock; Class B was issued in 1996.

Our calculation was inspired by Chris Bloomstran, chief investment officer of Semper Augustus Investments Group, who noted that Berkshire could drop 99.3% and still beat the S&P 500. "I mentioned that to Mr. Buffett several years ago," Bloomstran tweeted. "His reply: 'Ben Graham would be proud. But let's not test the math.' " Graham, one of the 20th century's top value investors, wrote The Intelligent Investor and was Buffett's mentor.

From 1965 through 2021, Berkshire shares generated a compound annual return of 20.1% against 10.5% for the S&P 500. Most of Berkshire's outperformance came earlier in Buffett's tenure, when he racked up huge gains. Over the past 20 years, Berkshire is just a percentage point ahead of the S&P 500, with a 10.3% annualized return against 9.2% for the index.