Huge Potential Stocks for a Million-Dollar Fortune by 2030: Three Massive Investment Opportunities
Warren Buffett, the legendary investor behind Berkshire Hathaway, has found success in part by favouring cyclical businesses. However, even his company has not been immune to the effects of bear markets. Berkshire Hathaway, historically, tends to perform better than the overall market during downturns due to Buffett's focus on value investing and quality businesses. Yet, during major bear markets such as the 1973-74 crash, it took nearly a decade for the US market to recover in real terms [3].
In contrast, tech giants like Alphabet (Google) and Amazon often see more pronounced volatility and sharper drawdowns during bear markets. For instance, tech stocks were heavily impacted in recent corrections and downturns. Amazon's average annual return over the last 10 years was about 3.9%, while Alphabet delivered around 3.5% per year over the same period, reflecting more moderate growth compared to past rapid expansions [4].
Achieving a nearly threefold increase on an initial investment of $350,000 by 2030 (roughly 5 years) would require an annualized return of about 22.5%. This is considerably higher than the average market returns of around 13-14% per year in the S&P 500 over the last decade [4]. Given their historical performance, Berkshire Hathaway might provide steadier but typically lower returns during volatile markets, while Alphabet and Amazon offer higher growth potential but with more risk.
Berkshire Hathaway's growth is primarily achieved through investments and acquisitions, with a portfolio of over 50 businesses, including insurer GEICO and railroad BNSF. The company is also expected to generate over $6 billion in passive income over the next 12 months.
Amazon, on the other hand, is estimated to account for 39.5% of all U.S. online sales in 2022. Its retail segment generates more than 200 million high-margin Prime subscriptions. Amazon Web Services (AWS), the world's leading cloud-service provider, accounted for a third of global cloud spending in the first quarter. YouTube, a subsidiary of Alphabet, has 2.56 billion monthly active users and is pulling in more than $29 billion in ad revenue annually.
Alphabet, the parent company of Google and YouTube, is one of the largest public companies in the world. Over the past 24 months, Google has accounted for 91% to 93% of global internet search share.
Warren Buffett and Charlie Munger have bought back over $61 billion worth of Berkshire Hathaway stock in less than four years. As of Dec. 31, 2021, Berkshire Hathaway's total return was 3,641,613%.
Meanwhile, Google Cloud, another segment of Alphabet, delivered 36% year-over-year sales growth during the second quarter.
In terms of bear market performance, Google Cloud and Amazon have experienced sharper declines but strong recoveries, while Berkshire Hathaway, led by Buffett, has often been seen as more resilient due to its value investing approach. However, achieving such high returns by 2030 would likely require either exceptional growth from Amazon or Alphabet stocks surviving another strong bull phase, Berkshire Hathaway delivering outsized returns through strategic investments or market conditions favouring value stocks, or a concentrated or leveraged strategy, which carries greater risk.
Historical averages suggest this is possible but not guaranteed and comes with notable risk [2][3][4].
- Warren Buffett's focus on cyclical businesses, Berkshire Hathaway's performance during downturns, and the company's emphasis on value investing suggest that it may offer steadier but typically lower returns during volatile markets and bear markets compared to tech giants like Alphabet and Amazon.
- The tech giants, Alphabet and Amazon, despite their historical performance, often face more pronounced volatility and sharper drawdowns during bear markets, as indicated by their average annual returns over the last 10 years and their vulnerability to corrections and downturns in recent years.
- Achieving a nearly threefold increase on an initial investment of $350,000 by 2030 would require an annualized return significantly higher than the average market returns, highlighting the higher growth potential but also the greater risk associated with investments in tech companies like Alphabet and Amazon, compared to Berkshire Hathaway.
