It included Kirby Company, which was sold in 2021, Wayne Water Systems, and Campbell Hausfeld products. In 1986, Berkshire acquired Scott Fetzer Company, a diversified group of 32 brands that manufactures and distributes products for residential, industrial, and institutional use, including Ginsu knives and World Book Encyclopedia. In 2020, Lee Enterprises acquired BH Media Group’s publications and The Buffalo News for $140 million in cash, retaining WPLG. In 2013, the company bought the Tulsa World, the Greensboro, North Carolina-based News & Record, Virginia’s Roanoke Times, and Press of Atlantic City. By 2019, the $25 million investment had returned over $2 billion, or an 8000% return, to Berkshire.
Berkshire’s annual shareholders’ meetings, nicknamed “Woodstock for Capitalists”, take place at the CHI Health Center Omaha in Omaha, Nebraska. In January 2010, as part of the acquisition of BNSF Railway, Berkshire completed a 50-to-1 stock split of its class B shares. Berkshire Hathaway sold its stake in Ulta Beauty in the fourth quarter of 2024, just two quarters after acquiring the shares.
Outstanding, shareholder-oriented management already in place
- You can find most of the letters for free on Berkshire’s website, but this compiles them into a well-designed, easily readable format.
- The letter was one page long and dealt with topics that included liquidating the assets of one textile mill and changes in Berkshire’s inventory.
- Buffett began investing in Wells Fargo in 1989; however, by the first quarter of 2022, Berkshire Hathaway had sold its entire interest in the company.
- Some shares were sold in 2023 and 2024, with Buffett motivated by the China–United States trade war.
In his mind, the best directors are those who have their interests best aligned with shareholders. Additionally, when able but greedy managers begin to “dip too deeply into shareholders’ pockets, directors must slap their hands.” If board members lack either integrity or the ability to think independently, the directors can actually do a great deal of harm to shareholders. At this point, Buffett has seen many CEO’s taking various actions that hurt their shareholders, including reckless acquisition and employing questionable accounting practices. Over this period, an average market return would have grown a $1,000 investment to $405,000 if all income had been reinvested.
As long as Berkshire’s managers continue to think like owners and manage their companies as if the companies are the only assets that they own, Berkshire shareholders can be confident that these outstanding results are likely to continue. His views on the tone and content of his correspondence are summarized in his 1979 letter, when he explains to his shareholders that he does not “expect a public relations document when our operating managers tell us what is going on, and we don’t feel you should receive such a document.” When he presents financial statements on a pro forma basis, he does so to reveal truth to his shareholders, rather than display the statements as if nothing bad had happened to the company. Additionally, in Buffett’s early letters, readers are able to see firsthand how he operates as a manager of a small company himself. In fact, for a number of years, at the end of each letter he would place an advertisement for possible acquisition candidates from his shareholders.
Berkshire Investment Policy
Inherently, the risk that the investor runs is that by forgoing consumption now, he may not have the ability to consume more later. Buffett simply defines investing as “forgoing consumption now to have the ability to consume more later.” Rather, Buffett feels that real risk is not volatility, but the potential that after-tax receipts from an investment will not result in a gain in purchasing power. As discussed, Buffett does not view volatility as an adequate measure of investment risk.
Annual letters and shareholders’ meetings
On August 26, 2011, Berkshire Hathaway bought $5 billion of preferred shares in Bank of America. Berkshire sold its remaining bonds and preferred stock to Mars in 2016. Berkshire also received warrants to buy 43.5 million shares with at $115 per share, which were exercisable at any time for a five-year term. In September 2008, at the peak of the 2008 financial crisis, Berkshire invested $5 billion in preferred stock in Goldman Sachs to provide it with a source of funding when capital markets had become constrained.
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Also in December 2007, when stresses that led to the 2008 financial crisis were forming, Berkshire created a government bond insurance company to insure municipal bonds, starting with New York State bonds. In July 2005, Berkshire Hathaway acquired Forest River, the world’s largest seller of recreational vehicles, from Pete Liegl for $800 million. The company later acquired Professional Datasolutions and Salado Sales. In October 2002, Berkshire acquired The Pampered Chef, the largest direct seller of kitchen tools in the United States. In June 2000, the company acquired Justin Brands, the parent company of Justin Boots, Acme Boots, and Acme Brick for $600 million in cash.
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In the third quarter of 2020, the company agreed to buy Dominion Energy’s natural gas transmission and storage operations. By April 2023, Berkshire increased its stake in each of those companies to 7.4%. In 2019, by buying warrants and preferred stock, Berkshire provided $10 billion in financing to Occidental Petroleum as part of its acquisition of Anadarko Petroleum. In June 2017, Berkshire acquired a 38.4% stake in Home Capital Group for $400 million, giving a lifeline to the Toronto-based embattled mortgage lender.
Analyzing Berkshire Hathaway’s Investment Approach
These companies have been swallowed by other groups, but their descendants, Fujitsu and Hewlett-Packard respectively, still have local operations. This is a chart of trend of regional gross value added of Berkshire at current basic prices published by the Office for National Statistics with figures in millions of British pounds sterling. Reading has experienced significant growth due to its reputation as a technology and business hub. The open upland areas vie with Newmarket, Suffolk for horse racing training and breeding centres and have good fields of barley, wheat, and other cereal crops. In the heart of the county Reading’s northern suburb Caversham is also on that bank, but rises steeply into the Chiltern Hills. A flag for berkshire hathaway letters to shareholders the historic county of Berkshire was registered with the Flag Institute in 2017.
- Under the right circumstances, there is very little that a manager can do to benefit his/her shareholders more than repurchasing undervalued shares.
- The standard of durability has served Buffett well over the years, keeping him out of the tech bubble in the late 1990s because the standard inherently eliminates companies in industries prone to rapid change.
- Additionally, Buffett states that the criterion of durability eliminates businesses whose success depends on having a great manager.
- Buffett sold around 30% of this stake in 2013 when he “soured somewhat on the company’s then-management”, realizing a profit of $43 million.
In April 2002, Berkshire acquired Fruit of the Loom for $835 million in cash. In February 2002, Berkshire acquired Albecca, headquartered in Norcross, Georgia, operating under the Larson-Juhl name. On April 23, 2010, Mitek acquired the assets of Dur-O-Wal from Dayton Superior. In May 2008, Mitek acquired Hohmann & Barnard, a fabricator of anchors and reinforcement systems for masonry.
Acquisitions
Buffett defended Lloyd Blankfein’s decisions as CEO of Goldman Sachs and his efforts to improve the reputation of the company during the 2008 financial crisis. Profit on the preferred stock was estimated at $1.8 billion and exercising the warrants yielded a profit of more than $2 billion. Goldman had the right to re-purchase the preferred stock at a 10% premium, and in March 2011 exercised this right paying $5.5 billion to Berkshire. The preferred stock yielded an annual interest rate of 10%, earning Berkshire $500 million in interest income per year. Buffett later described this as “a major mistake” as the price of oil collapsed during the Great Recession.
A few weeks later, Warren Buffett received the tender offer in writing, but the tender offer was for only $11.375 per share. Berkshire is one of the ten largest components of the S&P 500 and is on the list of largest employers in the United States. Berkshire Hathaway is ranked 5th on the Fortune 500 rankings of the largest United States corporations by total revenue and 9th on the Fortune Global 500. Originally a textile manufacturer, the company transitioned into a conglomerate starting in 1965 under the management of chairman and CEO Warren Buffett and vice chairman Charlie Munger (from 1978 to 2023). Berkshire Hathaway Inc. (/ˈbɜːrkʃər/) is an American multinational conglomerate holding company headquartered in Omaha, Nebraska.
Greg Abel now oversees most of the company’s investments and has been named as Buffett’s successor. The first batch will be sold at the Berkshire Hathaway Annual Meeting on May 4 in the convention center. The entire book is paginated, and has easy-to-flip-to labels for each letter’s year. There you can find a more detailed description, plus some sample pages and a chart detailing the performance of Berkshire’s insurance operations. Hooked to Books is your trusted source for book reviews, reading inspiration, and writing tips.
In January 1986, Berkshire acquired Fechheimer Brothers, owner of Flying Cross, which manufactures public safety uniforms, and Vertx, a civilian tactical clothing company. In 2014, Graham Holdings Company sold its Miami television station, ABC affiliate WPLG to BH Media in a cash and stock deal. In 1976, Berkshire first invested in GEICO, at a time when it was facing financial difficulty and had a very low stock price. He has estimated that had he invested the same money directly in insurance businesses instead of indirectly via Berkshire Hathaway (due to what he perceived as a slight by an individual), it would have paid off several hundredfold.
Abel’s official title is CEO of Berkshire Hathaway Energy and vice chair in charge of noninsurance operations. The main concern is whether Buffett’s successor can keep outperforming the market. In annualized terms, Berkshire’s stock generated an average yearly return of 20.1% over that period, while the S&P 500’s annualized gain was 10.5%. The overall return of Berkshire Hathaway’s stock from 1965 to 2021.
94 (Berkshire Yeomanry) Signal Squadron still keep the Uffington White Horse in their insignia, even though the White Horse is now within the ceremonial county of Oxfordshire. The northern part of the county came under governance of Oxfordshire, with Faringdon, Wantage and Abingdon and their hinterland becoming the Vale of White Horse district, and Didcot and Wallingford added to South Oxfordshire district. The administrative county’s full legal name was “Berks” rather than “Berkshire” until 1967, when the government changed the name to Berkshire at the county council’s request.
The historic county included the parts of Oxfordshire south of the River Thames, which formed its northern border, but excluded Caversham and Slough. The county has an area of 1,263 km2 (488 sq mi) and a population of 911,403. Berkshire (/ˈbɑːrkʃɪər, -ʃər/ ⓘ BARK-sheer, -shər; abbreviated Berks.), officially the Royal County of Berkshire, is a ceremonial county in South East England. In January 2025, the Consumer Financial Protection Bureau filed a lawsuit against Vanderbilt Mortgage and Finance, a Berkshire Hathaway subsidiary, alleging the company steered borrowers into unaffordable loans. In 2007, the company was named by Barron’s as the most respected company in the world based on a survey of American money managers.
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