Warren Buffett’s performance is even more amazing than you think.

Let’s have some fun with numbers today. Especially with some of the numbers in Berkshire Hathaway’s new annual report to its shareholders.

As usual, the report has garnered a lot of media attention because it includes a long, discursive annual letter from legendary investor Warren Buffett, who took control of Berkshire (BRK-A) (BRK-B) in 1965 and built on it a marginal textile company into a gigantic conglomerate.

But instead of discussing how Buffett decided to do it share buybacksFor the part of this year’s letter that’s garnered the most attention, let’s have some fun with some big numbers hiding in plain sight — and show how amazing Berkshire’s performance has been over the nearly six decades it’s been Buffett directed the show.

You’ll find those numbers on page 2 of the report, just before Buffett’s nine-page trademarked — yes, trademarked — screed. (You can find the numbers I’m talking about, Buffett’s letter, and the rest of the report Here.)

The most interesting number on the bottom line of page 2 is 3,787,464%. That’s the rise in Berkshire’s share price from late 1964 through late last year.

Now let’s do a little math.

At the end of 2022, Berkshire A shares — Berkshire’s only stock class when Buffett took control of the company — sold for $468,711. Since Buffett is known for never splitting Berkshire’s stock, I was wondering how much a Berkshire share was selling at the end of 1964, which is where the “Berkshire’s Performance vs. S&P 500” chart begins, which includes results from 1965 through 1964 2022 measures.

The answer is 12 -3/8. How did I get this number?

In two steps. First, I divided the 3,787,464% gain by 100 and added 1 for the original price. This means that the price at the end of 2022 was 37,875.64 times the price at the end of 1964. Using my handy calculator, I then divided the 2022 year-end price of $468,711 by 37,875.64. And ended up at pretty much exactly $12,375. So 12-3/8 is our starting price.

The story goes on

It’s absolutely amazing that a stock that was barely in double digits when Buffett took control is now valued in the mid-six figures. But that’s what the numbers tell us.

(I emailed Berkshire’s Chief Financial Officer Marc Hamburg, the contact listed in the annual report press release, to see if my calculations were correct. I received no response. But the numbers are the numbers.)

For unclear reasons, Berkshire paid a one-time cash dividend of 10 cents in 1967. I’m pretty sure the cent compounded over 55 years isn’t included in Berkshire’s 7-digit percentage earnings. I also asked Hamburg about it and heard nothing.

Now let’s have some more fun with the numbers by comparing the S&500 results to Berkshire’s results.

According to Berkshire’s calculations, the stock gained 19.8% annually from early 1965 through the end of 2022, compounded. That happens to be exactly double the 9.9% (including reinvested dividends) that Berkshire says the S&P 500 has gained.

However, if you look at the 58-year yield, you can see that Berkshire has outperformed the S&P by more than 150 to 1. You get that by dividing Berkshire’s yield of 3,787,464% by S&P’s yield of 24,708%. Which shows that Berkshire’s yield was a little over 153 times the S&P’s yield.

How on earth can an annual return that is twice as high produce a return that is 153 times as high? It’s the power of compounding over years and years. Double the return for 58 years, and that’s what you get.

One of the reasons Berkshire stock has performed so well is that Buffett issued a new stock class, Berkshire B, in 1996, which attracted a crowd of retail investors who would have priced out A shares.

Berkshire’s B shares, which are 1/1500th of a share after a 2010 split, now account for nearly 60% of the company’s stock.

This allows “Baby Berkshire” holders, including myself, to own a security that reflects the results of Berkshire’s never-divided, six-figure A shares. That way, we small investors get the same returns as Buffett, even though we own a triple-digit stock, instead of having to pillory ourselves by buying A-shares.

And that, my friends, is a classic example of fun with numbers.

Allan Sloan, who has written about business for more than 50 years, is a seven-time winner of the Gerald Loeb Award, business journalism’s highest honor. He has won Loebs in four different categories over four different decades.