If there is one name that reliably perks up ears on Wall Street, it is Warren Buffett, the CEO of Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B). That's because the company he heads has performed so well over the long term that he's been given the nickname "the Oracle of Omaha." Some investors even try to model their investment decisions based on the stocks in the Berkshire portfolio. Others take the easy route and just buy Berkshire's stock.

As exciting as it is to potentially profit from a living Wall Street legend, investors need to understand that Berkshire Hathaway isn't a "normal" company, and its stock is best suited for a certain type of investor. They need to take a closer look at how the stock operates before they buy shares.

Giving credit where credit is due, since the turn of the century, Berkshire Hathaway's stock has risen roughly 1,000%. That's incredible performance when you consider that the S 500 index, using SPDR S 500 Index ETF as a proxy, has gained "just" 260% over the same span. Even if you reinvested dividends, the total return on the S 500 only rises to around 460%, still trailing well behind Berkshire Hathaway, which doesn't pay dividends at all.

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Source Fool.com