Warren Buffett has been at the helm of the Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) investment company since 1965. He has steered the conglomerate to an average annual return of 19.8% during that 58-year stretch, double the return of the S 500 index over the same period.

But that doesn't tell the whole story. Thanks to the effects of compounding, a $1,000 investment in Berkshire in 1965 would be worth a whopping $37.8 million today. The same investment in the S 500 would be worth just $247,080.

Buffett's investing strategy is simple. He buys stakes in profitable companies with steady growth, especially if they regularly return money to shareholders and have strong management teams.

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Source Fool.com