Berkshire Hathaway
The holding company led by Warren Buffett and Charlie Munger, owning dozens of wholly-owned businesses and a $300+ billion equity portfolio.
Berkshire Hathaway
Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) is a multinational holding company headquartered in Omaha, Nebraska. Led by Warren Buffett and Charlie Munger (1924-2023), it has grown from a failing textile company in 1964 to one of the world's largest and most successful companies.
The Numbers (as of 2025)
| Metric | Value |
|---|---|
| Market Cap | ~$1 trillion |
| Book Value | ~$650 billion |
| A Shares (2025) | ~$900,000+ per share |
| Annual Growth (1965-2025) | ~20% CAGR |
$10,000 invested in 1964 would be worth approximately $500 million today.
Two Investment Engines
Berkshire operates through two distinct business models:
1. Insurance Operations (The Float Machine)
Insurance businesses collect premiums upfront and pay claims later. The "float" — premiums collected but not yet paid out — is Berkshire's secret weapon.
| Company | Type | Market Position |
|---|---|---|
| geico | Auto Insurance | 6th largest in US |
| General Re | Reinsurance | Global leader |
| Berkshire Hathaway Reinsurance Group | Catastrophe, Life | Diversified |
| BH Primary | Various small insurers | Growing |
The Float Advantage:
- Float cost is essentially zero (sometimes negative when underwriting is profitable)
- Buffett has deployed this cheap capital into equity investments and acquisitions for 60+ years
- Current float: ~$170 billion
2. Wholly-Owned Operating Businesses
Berkshire owns 70+ operating companies outright:
| Segment | Key Companies |
|---|---|
| Railroad | BNSF Railway |
| Utilities | MidAmerican Energy, NV Energy |
| Manufacturing | sees-candies, IMC, Lubrizol |
| Services | Dairy Queen, FlightSafety |
| Retail | Various home furnishing companies |
These businesses generate ~$30-40 billion in pre-tax earnings annually, providing stable cash flow for continued deployment.
Equity Portfolio (~$300+ Billion)
Berkshire's publicly traded stock portfolio is one of the largest in the world:
| Holding | Approximate Value | % of Portfolio |
|---|---|---|
| apple | ~$175 billion | ~50% |
| bank-of-america | ~$35 billion | ~10% |
| american-express | ~$30 billion | ~8% |
| Chevron | ~$20 billion | ~6% |
| Kraft Heinz | ~$15 billion | ~4% |
Note: See latest 13-F filings for current data.
Buffett's Capital Allocation Philosophy
- Invest in high-return businesses when prices are reasonable
- Acquire wholly-owned businesses when they can be bought at fair prices
- Return capital via buybacks when stock is below intrinsic value
- Hold cash when nothing meets the margin-of-safety threshold
Never Pay a Fair Price
"It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."
This shifted Berkshire's focus from Graham's "cigar-butt" approach to buying durable, wonderful businesses at reasonable valuations.
Class Structure
| Class | Price (2025) | Voting Rights |
|---|---|---|
| BRK.A | ~$900,000 | Full voting rights |
| BRK.B | ~$6,000 | 1/1500th of A vote |
The dual-class structure preserves Buffett's control and long-term thinking against short-term shareholder pressure.
No Dividend Policy
Berkshire has no dividend. Buffett explains:
"We think the optimal dividend policy is almost always to let earnings compound internally at high rates of return, rather than pay dividends and have shareholders taxed."
When Berkshire cannot profitably reinvest capital, it buys back stock — Berkshire repurchased ~$60 billion of its own stock in 2019-2023 when trading below intrinsic value.
The Munger Legacy
Munger shaped Berkshire as much as Buffett:
- Convinced Buffett to shift from "cigar-butt" to "wonderful business" investing
- Introduced multidisciplinary thinking (mental models)
- Ensured ethical culture and "right people" focus
His passing in 2023 marked the end of an era, though his principles remain embedded in Berkshire's culture.
Why Berkshire Endures
- Durable moat businesses — Insurance, railroads, utilities have high barriers to entry
- Float as perpetual capital — Insurance model provides cheap, growing capital
- Long-term orientation — No pressure for quarterly results
- Cultural continuity — Succession plans in place (Greg Abel as future CEO)
- Decentralized management — Subsidiary CEOs operate with autonomy
Annual Meeting (Woodstock for Capitalists)
Every April, 30,000+ shareholders gather in Omaha for:
- Q&A marathon — 6+ hours of Buffett and Munger (now Abel) answering questions
- Shopping — Berkshire subsidiaries sell products at discounts
- MiniMBA — Informal business education
The meeting is broadcast live and is the most widely watched corporate event in the world.
Key Documents
- Annual Report (February) — Buffett's letter to shareholders + full financial statements
- Shareholder Letters (1957-present) — The world's best free investment education
- 13-F Filings (Quarterly) — Public equity holdings disclosure
Summary
Berkshire Hathaway is not just a company — it is a unique capital allocation system that has:
- Turned $10,000 into ~$500,000,000 today
- Created more individual billionaires than any other company
- Proved that patient, rational capital allocation beats market timing
Related
- warren-buffett — CEO and chairman
- charlie-munger — Vice chairman (deceased)
- moat — Why its businesses endure
- insurance-float — The secret weapon
- geico — Key insurance subsidiary