BERKSHIRE HATHAWAY (BRK.B) Stocks
ABOUT BERKSHIRE HATHAWAY
📊 Berkshire Hathaway Inc. Class B is an American multinational conglomerate holding company. The company owns a diverse range of businesses that include retail, home furnishings, confectionery, vacuum cleaner manufacturers, railroads, several regional electric and gas utilities, encyclopaedias, newspaper publishing, jewellery sales as well as the manufacturing and distribution of uniforms.
📊 Since 1965 Berkshire Hathaway has averaged an annual growth in book value of 19.0% to its shareholders while employing large amounts of capital and minimal debt – compared to 9.7% for the same period from the S&P 500 with dividends included.
📊 The company’s subsidiaries include H.J. Heinz Company, GEICO, Dairy Queen, NetJets, Nebraska Furniture Mart, HomeServices of America, Brooks Sports, Borsheims’ Fine Jewelry, Forest River, Pampered Chef, Helzberg Diamonds and PacifiCorp. The company’s history goes back 180 years to 1839 when it is founded in Cumberland Rhode Island. Today the company’s headquarters is in Omaha, Nebraska and it has approximately 389 373 employees.
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OVERVIEW OF BERKSHIRE HATHAWAY
- Berkshire Hathaway starts as a textile manufacturing company, the Valley Falls Company, in Valley Falls, Rhode Island in 1839. The Valley Falls Company merges with the Berkshire Cotton Manufacturing Company in 1929, becoming Berkshire Fine Spinning Associates. The company merges with the Hathaway Manufacturing Company in 1955 and becomes Berkshire Hathaway. Warren Buffett starts buying company stocks in 1962.
- Buffett becomes the majority stock owner after 1964.
- The textile business is failing and by 1967 Buffett expands into the insurance industry and other investments. Berkshire buys the insurance business the National Indemnity Company. In the late 1970’s the company buys an equity stake in the Government Employees Insurance Company (GEICO) which is still the core of its insurance business today. GEICO is also a major capital source for Berkshire’s other investments. The company’s last textile operations are closed in 1985.
- Companies wholly owned by Berkshire include Duracell, BNSF, Fruit of the Loom, Long & Foster.
- Berkshire Hathaway is the third largest public company in the world, the tenth largest conglomerate by revenue and the largest financial services company by revenue in the world, according to the Forbes Global 2000 list and formula. Currently the company is the seventh largest company in the S&P 500 Index by market capitalization. It is famous for the most expensive share price in history – $300 000 each for a Class A share – as there have never been a stock split.
- In 1984 – in a letter to the shareholders – Buffet said there would never be a stock split. In October 2006 shares close over $100 000 for the first time.
For many years the company is not included in broad stock market indexes such as the S&P 500 as its shares lack liquidity.
- But, after a 50-to-1 split of Berkshire’s Class B shares in January 2010 and the company’s announcement that it is buying the Burlington Northern Santa Fe Corporation (parent company of BNSF Railway) the company replaces BNSF in the S&P 500 in February 2010.
- Warren Buffett owns 30.71% of the aggregate voting power and 16.45% of the economic interest. The second largest Berkshire shareholder is Bill Gates’ Cascade Investment LLC which owns more than 5% of the Class B shares. The company has never split its Class A shares as management wants to attract long-term investors – opposed to short-term speculators. Berkshire Hathaway however created a Class B Stock. Holders of Class A stock can convert their stock to Class B but not the other way around. Buffett only created the Class B shares to thwart the creation of unit trust which would have marketed themselves as company look-alikes.
VALUES OF BERKSHIRE HATHAWAY
- Berkshire Hathaway’s mission is to deliver the right parts exactly on time, to exceed its internal and external customer requirements through continuous improvement and provide a place for hard-working, dedicated, knowledgeable and ethical people who believe in the company.
- The company’s core values are growth, relationships, authenticity, compassion, empowerment and service.
MARKET PERFORMANCE OF BERKSHIRE HATHAWAY
- Berkshire Hathaway Inc. Class B trades on the New York Stock Exchange under the NYSE Stock Symbol “BRK.B”.
- In February 2019 the company releases its Fourth Quarter earnings for 2018. Its total revenue for 2018 is $257.5 billion and its operating income is $10.02 billion. The company’s net income is $4.02 billion and its total assets amount to $707.08 billion for 2018. Total equity amounts to $348.7 billion.
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LATEST NEWS BERKSHIRE HATHAWAY
Before buying any stock or share one has to consider a few factors.
STEP 1: PROPER RESEARCH IS ESSENTIAL
Upon deciding you want to buy BERKSHIRE HATHAWAY Stocks / Shares, it is critical for the serious investor to do proper research into the said company. Its values should align with those of the investor’s current portfolio. An investor needs to familiarise himself with the basics and history of the company, as well as its leadership and performance in the market. Its company reports should also be scrutinized.
Consultation with a brokerage firm can also assist in determining whether investing in a specific company will complement the investor’s current portfolio. The investment “risk ladder”, which identifies asset classes based on their relative riskiness, is another useful tool when determining which company’s stock / share is the best to buy.
STEP 2: CALCULATE THE AMOUNT OF INVESTMENT IN BERKSHIRE HATHAWAY STOCKS / SHARES
It is important for an investor to monitor his total investment in stock in order to keep his portfolio aligned to his investment strategy. The overall value of his holdings will change with the fluctuation in stock prices, which can throw his portfolio off balance. To determine the amount to invest, multiply the number of shares of each stock by its current market price to determine the total investment in that specific stock. For example, if you own 100 shares of a $5 stock, multiply 100 by $5 to get $500.
STEP 3: DECIDE ON THE STOCK / SHARE ORDER TYPE
Investors can choose from a market order, a limit order, a stop order (also referred to as a stop-loss order) or a buy/sell stop order. It is important to familiarise yourself with each type’s pros and cons before deciding which one will suit your current stock profile best. An investor should be guided in this choice by his investment objective.
STEP 4: OPEN A BROKERAGE ACCOUNT
A brokerage account – also known as taxable investment account – is similar to a retirement account, but more flexible. Where a retirement account has limitations on the amount of money that can be contributed annually, and restrictions on when funds can be withdrawn, a brokerage account is more flexible. The latter has no income or contribution limit and the investor can withdraw his money at any given time. This flexibility, together with its potential investment gains, makes a brokerage account more attractive to serious investors. Brokerage accounts are ideal for goals or savings that are further than five years away, but closer than retirement. It can also supplement an investor’s emergency savings.
STEP 5: COMMIT AND PURCHASE BERKSHIRE HATHAWAY STOCKS / SHARES
Lastly, commit to the stock. Pro Tip: Monitor the value of your stock to ensure you have a growing stock value and dividend pay-out. Regularly check the share price online to ensure your investment delivers a positive return on investment. You are now a proud owner of BERKSHIRE HATHAWAY stocks / shares.
5 Questions to ask yourself before purchasing any stocks or shares.
- Is it the best time to buy this stock / share?
- Should I buy BERKSHIRE HATHAWAY stocks / shares in the current economic climate?
- Can I afford to buy this stock / share?
- What is the forecast of the stock / share growth?
- What is the current price per earning ration on the stock / share?
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