There won’t be another Warren Buffett because no one will have his advantages

“I SHALL not look upon his like again,” declares Hamlet, ruminating over the loss of his father at the beginning of the play. Since Warren Buffett announced his retirement from Berkshire Hathaway this month, financial commentators have been asking themselves the same question: Can anyone live up to Buffett’s successes?

And they are remarkable. Buffett started to use Berkshire – a New England textile business – as his investment vehicle in June 1965. Over the next 60 years, he managed to compound the Berkshire share price at 20 per cent a year, a rate twice that of the S&P 500, a fantastic record, as we have spent the past two weeks hearing about.

To determine whether or not someone can match Buffett’s record, we first need to examine how he achieved it. Buffett was a good stockpicker, but this alone does not account for Berkshire’s performance and in any event, it was not solely his ability which drove this aspect of its returns.