Investing

Gabelli started buying Buffett's Berkshire on the cheap in 1986. His stake is now worth $83 million

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Key Points
  • Mario Gabelli told CNBC he first bought shares of Warren Buffett's Berkshire Hathaway in 1986.
  • The Gamco Investors CEO has made a return of nearly 6,200% based the stock's price Monday, showing the power of buy-and-hold investing.
  • Gabelli's interview came two days after Buffett, widely seen as one of the greatest investors of all time, released his annual letter to shareholders.

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Longtime investor Mario Gabelli on what he learned from Buffett's 2021 letter

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

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

Combined, the funds own 220 shares of Berkshire Hathaway's Class A stock, which was trading around $377,000 apiece Monday afternoon. Gabelli said his cost basis — the average price paid to build the position over time — is $6,000 per share, or $1.32 million in total.

The holdings are worth roughly $83 million now, representing a return of nearly 6,200%, based on Monday's price of Berkshire's Class A stock. Berkshire also has lower-priced Class B shares, launched in 1996, that trade on the New York Stock Exchange. (Gamco also owns around 135,000 shares of Berkshire Class B, priced at a fraction of the A shares, at around $250 each.)

Gabelli's interview on CNBC came two days after Buffett, widely seen as one of the greatest investors of all time, released his annual letter to shareholders. The letter and Berkshire's annual meeting a couple of months later are closely watched occasions 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 meeting, which has been called the Woodstock of Capitalism. Gabelli has been going to Berkshire's gathering for decades.

"In its brief 232 years of existence ... there has been no incubator for unleashing human potential like America," wrote the 90-year-old Buffett, known as the "Oracle of Omaha." "Despite some severe interruptions, our country's economic progress has been breathtaking. Our unwavering conclusion: Never bet against America."

Buffett, Berkshire's chairman and CEO, also disclosed in the letter that the company has already bought back more of its own stock this year, after repurchasing a record $24.7 billion in 2020.