Berkshire Hathaway is a major American holding company, consistently ranked among the top five publicly traded companies globally by Forbes. Since the mid-1960s, Warren Buffett has led the conglomerate, headquartered in Omaha, Nebraska.
Initially, Berkshire Hathaway was involved in textiles and cotton manufacturing, dating back to the early 1800s. However, the business struggled in the 1950s and 1960s, leading to plant closures and layoffs. Buffett gradually gained control by buying shares over time. The owner offered to buy back Buffet’s shares but slighted him on the final price offer.
In 1964, after a dispute over a buyback offer, Buffett took decisive action, bought out the then President Stanton and installed his own president. He then focused on restructuring the company’s financial operations.
By 1967 he began buying his first insurance companies, a tradition he continues to this day. The first insurance ventures he purchased were National Fire and Marine Insurance and National Indemnity. GEICO has been the largest one he acquired.
Today, Berkshire Hathaway is an enormous holding company, frequently ranked as the fifth-largest publicly traded company in the world by Forbes. Buffett has fully acquired companies such as GEICO, Lubrizol, BNSF, Fruit of the Loom, Dairy Queen, Helzberg Diamonds, NetJets, and Flight Safety International.
Additionally, Berkshire holds a 26% stake in Kraft Heinz Company and an unknown percentage of Mars, Inc. Significant minority holdings include Coca-Cola, American Express, Apple, IBM, Wells Fargo, and Restaurant Brands International.
Under Buffett’s leadership, Berkshire Hathaway has seen remarkable success. As Chief Investment Officer, Chairman of the Board, and CEO, Buffett has grown the company’s book value by an average of 19.7% annually over the past 49 years, compared to the S&P 500’s 9.8% average including dividends. The company has deployed substantial capital with minimal debt during this period. Charlie Munger, the Vice Chairman of the Board, is another key figure in the company.
Buffett’s investment strategy has evolved over time. Initially, he focused on long-term investments in publicly traded companies. In recent decades, he has shifted to acquiring entire companies, resulting in a diverse portfolio that includes businesses in retail, insurance, jewelry, candy, home furnishings, railroads, vacuum cleaners, encyclopedias, uniform manufacturing, newspaper publishing, and gas and electric utilities in the U.S. and U.K.
As Buffett ages, the future of Berkshire Hathaway has concerned shareholders. Buffett has outlined a succession plan that separates his roles of CEO, Chief Investment Officer, and Chairman of the Board. For CEO, he suggests selecting one of the 50 subsidiary CEOs who has proven themselves within the organization. For investment management, Buffett has hired several capable individuals over the past decade to handle a portion of the investment portfolio. For Chairman of the Board, Buffett prefers a family member, such as his eldest son Howard, who as of 1992, became director of Berkshire Hathaway, Inc., and President of Buffett Farms. Howard also has been a Director of The Coca-Cola Company since December 9, 2010.
