Berkshire Hathaway

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DEFINITION of 'Berkshire Hathaway'

A holding company for a multitude of businesses run by Chairman and CEO Warren Buffett. Berkshire Hathaway is headquartered in Omaha, Nebraska and began as just a group of textile milling plants, but when Buffett became the controlling shareholder in the mid 1960s he began a progressive strategy of diverting cash flows from the core business into other investments.

Insurance subsidiaries tend to represent the largest pieces of Berkshire Hathaway, but the company manages hundreds of diverse businesses all over the world.

BREAKING DOWN 'Berkshire Hathaway'

Because of Berkshire Hathaway's long history of operating success and keen stock market investments, the company has grown to be one of the largest in the world in terms of market capitalization. Berkshire stock trades on the New York Stock Exchange in two classes, A shares and B shares. The A shares are noted for their very high prices - in excess of $100,000 per share in 2007.

Early in his career Buffett came across the novel idea to use the "float" from his insurance subsidiaries to invest elsewhere, mainly into focused stock picks that would be held for the long term. Buffett has long eschewed a diversified stock portfolio in favor of a handful of trusted investments that would be overweighted in order to leverage the anticipated return. Over time, his investing prowess became so noted that Berkshire's annual shareholder meetings became a mecca for value investing proponents and the focus of intense media scrutiny.

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RELATED FAQS
  1. How important are contingent liabilities in an audit?

    Contingent liabilities, when present, are very important audit items because they normally represent risks that are easily ... Read Full Answer >>
  2. Who are Berkshire Hathaway's (BRK.A) main competitors?

    Led by renowned investor Warren Buffett, Berkshire Hathaway (BRK.A) is involved with multiple sectors of industry, facing ... Read Full Answer >>
  3. Are there leveraged ETFs that track the banking sector?

    A number of exchange-traded funds (ETFs) track the banking sector. Among them are ProShares Ultra KBW Regional Banking, ProShares ... Read Full Answer >>
  4. What is Warren Buffett's investment history with the Washington Post?

    In 1964, Warren Buffett took over majority ownership of Berkshire Hathaway and turned it into a multinational conglomerate ... Read Full Answer >>
  5. What's the best way to contact Warren Buffett?

    While Warren Buffett is very difficult to contact personally, it is possible to contact Berkshire Hathaway, the textile manufacturing ... Read Full Answer >>
  6. What is Charlie Munger's current role at Berkshire Hathaway, and what is his history ...

    Charlie Munger has been vice-chairman of Berkshire Hathaway since 1979. Essentially, Munger acts as the right-hand man and ... Read Full Answer >>
  7. What schools did Warren Buffett attend on his way to getting his science and economics ...

    Warren Buffett never had the intention of going to college. By age 13, he was managing his own business as a paperboy. He ... Read Full Answer >>
  8. What are the differences between Warren Buffett and Charlie Munger's business philosophies?

    Warren Buffett and Charlie Munger have long been business partners through Berkshire Hathaway, with the former serving as ... Read Full Answer >>
  9. What was the largest company Warren Buffett ever bought through Berkshire Hathaway?

    The largest acquisition that Warren Buffett has made through Berkshire Hathaway is the Burlington Northern Santa Fe Railway ... Read Full Answer >>
  10. What is Warren Buffett's relation to "Supercat" insurance?

    Warren Buffett, or rather Berkshire Hathaway, is a big player in the super-catastrophe catastrophe reinsurance business. ... Read Full Answer >>
  11. What was the worst investment Warren Buffett made in his career?

    According to Warren Buffett, the worst investment of his career was his purchase of Berkshire Hathaway. Buffett first got ... Read Full Answer >>
  12. Why doesn't Warren Buffett split Berkshire Hathaway stock?

    Warren Buffett has never done a stock split of Berkshire Hathaway Class A shares (BRK.A), and he has flatly stated that Class ... Read Full Answer >>
  13. What is the difference between Berkshire Hathaway's Class A and Class B shares?

    The primary difference between Berkshire Hathaway Class A stock and Class B stock is one of price. Because of the price difference, ... Read Full Answer >>
  14. Given the decline of print media, why did Warren Buffett invest in so many local ...

    Despite a significant decline in print media, Warren Buffett has invested heavily in local newspapers due to his understanding ... Read Full Answer >>
  15. How does the "Buffett Premium" increase Berkshire Hathaway's stock price?

    Though not an official term, the "Buffett premium" theory is an idea that Buffett's name or presence adds value to Berkshire ... Read Full Answer >>
  16. When does Warren Buffett usually release his letter to shareholders?

    Warren Buffett normally releases his annual letter to investors toward the end of February or at the beginning of March. ... Read Full Answer >>
  17. What's the largest charitable donation Warren Buffett ever made?

    The most significant charitable donation Warren Buffett ever made is the $37 billion pledge to the Bill and Melinda Gates ... Read Full Answer >>
  18. Is there any history of insider trading with Warren Buffett or Berkshire Hathaway?

    Berkshire Hathaway came under intense scrutiny in 2011 for possible insider trading prior its acquisition of the chemicals ... Read Full Answer >>
  19. What is Warren Buffett's annual salary at Berkshire Hathaway?

    Berkshire Hathaway pays Warren Buffett a $100,000 annual salary, technically speaking. His total compensation was around ... Read Full Answer >>

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