Why Berkshire Hathaway is the ultimate case study for Indian investors, according to Ramesh Damani

Berkshire Hathaway’s rise from a $75 stock in 1977 to nearly $750,000 today is not just an American investing legend—it is, in Ramesh Damani’s view, the purest illustration of what most Indian investors still fail to understand: the transformative power of long-duration compounding.Speaking to CNBC-TV18’s Prashant Nair at Motilal Oswal’s 30th Wealth Creation Study event, Damani, Member, BSE, said Berkshire remains the global benchmark for patient capital and the single most powerful example of how sustained compounding—not clever timing—creates generational wealth. “The point is not that Berkshire compounded; it’s that it compounded uninterrupted for 45 years. That longevity is what creates extraordinary wealth,” he said.

Damani recalled that Berkshire was priced at $75 a share in 1977. “If someone had invested $75,000 for 1,000 shares back then and done nothing, that investment would be worth around $750 million today. That’s the power of compounding,” he noted. To him, the scale of wealth creation is less about the annual rate of return and more about the discipline to let compounding run through multiple market cycles.

He cited a personal anecdote to illustrate this behavioural challenge. Some of his relatives bought Berkshire stock early but sold during the 1987 crash, converting what could have been generational wealth into a short-lived gain. “They sold from $3,000 down to $2,500 and were very happy. Today, of course, that looks painful in hindsight,” Damani said. The episode, he added, underlines why investors often sabotage long-term wealth by reacting to short-term volatility.
According to him, Berkshire’s journey underscores a broader lesson for Indian retail investors: markets reward those who stay invested across decades, not those who jump in and out based on fear or euphoria. “Compounding at 20% for 45 years is what creates massive effect. The maths is astonishing,” he said.Damani believes Indian equities are no different in potential. He pointed out that long-term compounders in India—from consumer franchises to defence PSUs—have delivered exceptional returns for investors who held on. But, he argues, the discipline to stay invested is far less common in India than the appetite to trade.

“You cannot interrupt compounding and expect extraordinary outcomes,” he said, adding that Berkshire’s track record should be mandatory study material for Indian investors. The conglomerate’s disciplined capital allocation, focus on high-quality businesses, and refusal to chase fads, he believes, offer timeless lessons for India’s growing investor base.

Also Read | Samir Arora highlights the reasons why investors should consider buying Indian stocks

For Damani, Berkshire Hathaway is more than a success story—it is a roadmap. It shows that wealth creation is not about predicting the next multibagger, but about owning good businesses for long periods and allowing compounding to do the heavy lifting. In his view, that is the lesson Indian investors need to internalise most urgently.

Watch accompanying video for entire discussion.