Buffett Highlights 30% Small-Cap Discount, Citing 8,000% Sees Return
BRKA•At the 2026 shareholder meeting, Warren Buffett said if he started anew with $10,000 he would target small businesses, citing his 1972 $25 million See’s Candies purchase that yielded an 8,000% return by 2019. He noted small-caps traded roughly 30% below large-caps at end-2023 and stressed compounding through early investing.
1. Small-Cap Strategy Emphasis
At the 2026 annual meeting, Buffett said that if he were to restart with $10,000 he would concentrate on small businesses where opportunities are often overlooked. He believes working with smaller sums increases the chance of discovering undervalued companies with room to grow.
2. Historical See’s Candies Performance
Buffett highlighted his 1972 acquisition of See’s Candies for $25 million when it had $4 million in annual profits. By 2019 the unit generated $2 billion in pre-tax income for Berkshire, representing an 8,000% return on investment.
3. Valuation Gap and Compounding Benefits
He pointed out that small-cap stocks traded about 30% below large-caps at the start of Q4 2023, a valuation gap near a 25-year low. Buffett used the snowball metaphor to illustrate how compounding early investments drives outsized long-term gains.
4. Importance of Early Investing
Buffett stressed that starting early is key to harnessing compound interest, noting the majority of his wealth was built after age 65. He encouraged investors to begin with whatever capital they have to let returns accumulate over time.
