A few days ago, I posted about the Los Angeles Lakers being sold for $10 billion (see here). The team was bought in 1965 for $5.175 million by Jack Kent Cooke (see here). What a crazy increase in value: $5.175 million to $10 billion over 60 years. Looking at the average rate of growth in team value per year, or compound annual growth rate (CAGR), it’s roughly 13.5%—over 60 years.

I wanted to see how this compares to the returns of great investors. The easiest comparative is Warren Buffett, since he began investing professionally in the 1950s and just retired. According to CNBC, Buffett took over Berkshire in 1965, and from then through the end of 2024, Berkshire shares rose 5,502,284%. CNBC says that equates that to a CAGR of 19.9%. See the details here.

So, owning the Lakers turned $5.175 million into $10 billion, and that was amazing, but investing with Buffett in Berkshire would have far outpaced that, assuming you invested $5.175 million and held the entire time.

Using a reverse CAGR calculator (see here), if you invested $5.175 million in 1965 and got Buffett’s 19.9% CAGR, you’d have $277.3 billion by the end of 2024.

Ten billion dollars and $277.3 billion. That’s the difference between compounding at 13.5% and compounding at 19.9% over 60 years. That 6.4 percentage-point difference is a $267.3 billion difference!