Mario Gabelli made practically 6,200% on stake in Buffett’s Berkshire


Value investor Mario Gabelli told CNBC on Monday that he first bought shares in Warren Buffett’s Berkshire Hathaway in 1986. Decades later, he’s made more than 60 times his money, which illustrates the power of buy-and-hold investing.

In an interview on Squawk Box, the CEO of Gamco Investors said the purchases were for two of its mutual funds: Gabelli Equity Trust Inc. and Gabelli Asset Fund. The funds began investing a few months apart in 1986.

Together, the funds own 220 Berkshire Hathaway Class A shares, which traded approximately $ 377,000 apiece on Monday afternoon. Gabelli said his cost base – the average price paid to build the position over time – is $ 6,000 per share, or $ 1.32 million total.

The holdings are now valued at approximately $ 83 million, a return of nearly 6,200% based on the Monday price of Berkshire Class A stock. Berkshire also has cheaper Class B shares, launched in 1996 and traded on the New York Stock Exchange. (Gamco also owns approximately 135,000 Berkshire Class B shares at a fraction of the A shares at approximately $ 250 each.)

Gabelli’s interview on CNBC came two days after Buffett, widely regarded as one of the greatest investors of all time, posted his annual letter to shareholders. The Berkshire letter and annual meeting a few months later are being watched closely across the investment community. Like last year, Berkshire’s meeting will be virtual due to Covid.

Before the coronavirus pandemic, tens of thousands of people flocked to the annual gathering called The Woodstock of Capitalism. Gabelli has attended Berkshire’s Congregation for decades.

“In the short 232 years of its existence … there was no incubator to unleash human potential like America,” wrote the 90-year-old Buffett, known as the “Oracle of Omaha”. “Despite some serious interruptions, our country’s economic progress has been breathtaking. Our unshakable conclusion: Never bet against America.”

Berkshire chairman and CEO Buffett also announced in the letter that the company has already bought back more of its own shares this year after buying back a record $ 24.7 billion in 2020.