Berkshire Hathaway Inc. (NYSE: BRK.A) (NYSE: BRK.B)
Investment Considerations
- Berkshire Hathaway is a diversified multinational conglomerate with holdings across multiple industries, including insurance, energy, transportation, manufacturing, and retail.
- The company has a strong track record of delivering long-term shareholder value, with a compound annual growth rate of 19.8% from 1965 to 2023, significantly outperforming the broader market.
- Berkshire’s financial strength, with a cash reserve exceeding $277 billion in 2024, provides flexibility to capitalize on strategic investment opportunities.
- The company’s decentralized business model and focus on acquiring well-managed, cash-generating businesses offer stability and diversification for investors.
- With a leadership transition planned for the future, Berkshire Hathaway remains committed to its disciplined investment approach and long-term growth strategy.
Berkshire Hathaway Inc. (NYSE: BRK.A) (NYSE: BRK.B), headquartered in Omaha, Nebraska, is a multinational conglomerate holding company. Originally a textile manufacturer, Berkshire was transformed into one of the world’s most valuable companies under the leadership of Warren Buffett. The company operates through a diverse portfolio of wholly owned subsidiaries and equity investments across various industries, making it one of the most well-diversified corporations in the world.
Berkshire’s core businesses include insurance, with GEICO and Berkshire Hathaway Reinsurance Group among its key subsidiaries; transportation, primarily through BNSF Railway; and energy, through Berkshire Hathaway Energy. The company also has significant exposure to consumer goods, industrials, and financial services, owning or holding major stakes in companies such as Apple, Coca-Cola, American Express, and Bank of America.
With one of the largest cash reserves in corporate history, Berkshire maintains financial flexibility that allows it to make opportunistic investments during market downturns. The company’s Class A shares are among the highest-priced stocks in the U.S. market, reflecting investor confidence in its long-term strategy. The introduction of Class B shares in 1996 provided broader accessibility to investors, offering equivalent economic interests at a fraction of the price with reduced voting rights.
Market Opportunity
Berkshire Hathaway’s diverse business model positions it to benefit from growth across multiple sectors, including insurance, energy, consumer goods, and technology. The company’s ability to allocate capital effectively, combined with its vast financial resources, allows it to invest in undervalued businesses and industries with strong long-term potential.
The company’s significant investments in market-leading companies provide exposure to industries with high growth potential, while its wholly owned businesses generate stable cash flow, allowing for further acquisitions and reinvestments. Berkshire’s ability to navigate economic cycles and capitalize on downturns reinforces its position as a long-term value investment.
Leadership Team
Warren Buffett serves as Chairman and Chief Executive Officer of Berkshire Hathaway, a role he has held since 1965. Under his leadership, the company has grown from a struggling textile business into a global conglomerate with hundreds of billions in assets. He remains a key figure in shaping Berkshire’s investment strategy and corporate direction.
Greg Abel is Vice Chairman of Non-Insurance Operations and oversees Berkshire’s vast portfolio of businesses outside the insurance sector. He is widely regarded as Buffett’s successor, ensuring continuity in leadership and strategic decision-making.
Ajit Jain is Vice Chairman of Insurance Operations and leads Berkshire’s extensive insurance businesses, including GEICO and Berkshire Hathaway Reinsurance. His expertise in risk management and underwriting has played a significant role in the company’s long-term profitability.
