Buffett's Early Small-Cap Value Strategy Still Relevant Today
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On October 20, 2026, the CFA Institute Research and Policy Center published an article stating that Warren Buffett's early small-cap value investment strategy remains relevant today. During his management of investment partnerships from 1957 to 1968, Buffett achieved an annualized total return of 25.3%, compared to a 9.1% gain in the Dow Jones Industrial Average over the same period. The core of this strategy focuses on undervalued small-cap stocks, corporate restructuring, and shareholder influence targets. The current expansion of passive investing and reduced analyst coverage leading to small-cap pricing inefficiencies are seen as market conditions suitable for replicating this strategy.
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- CFA Institute Research and Policy Center: PublicationsWarren Buffett's Small-Cap Value Strategy for Today's Investors
Warren Buffett's early small-cap value investing strategy remains relevant today. His investment partnership delivered an annualized total return of 25.3% from 1957 to 1968, compared with 9.1% for the Dow Jones Industrial Average over the same period. The strategy centers on undervalued small-cap stocks, corporate restructurings, and positions with shareholder influence. The current expansion of passive investing and declining analyst coverage have created pricing inefficiencies in small-cap stocks, establishing market conditions for replicating this strategy.
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