The largest shareholder of the world’s third-largest asset manager is a company you probably haven’t heard of before. That company is Berkshire Hathaway, and its stake in the company is now so large that it’s known in the investing world simply as “the Warren Buffett index.”
Berkshire Hathaway is a holding company that also owns several subsidiaries, including Geico Insurance, Dairy Queen, Fruit of the Loom, BNSF Railroads, and several other well-known brands.
It was founded by Warren Buffett in 1962, and now has a value of more than $350 billion. Buffett is one of the world’s most famous investors, and his company is known for its long-term, value-oriented investment strategy.
In this article, we’ll take a closer look at what Berkshire Hathaway is, how it works, and its main holdings. We’ll also discuss key facts about its stock and where you can buy it.
What Is Berkshire Hathaway?
Berkshire Hathaway is a holding company that invests in stocks, bonds, real estate and more. The company’s main goal is to make long-term investments in companies it deems to have good value. Berkshire Hathaway was founded by billionaire Warren Buffett and has a market capitalization of over $350 billion.
The company’s headquarters are in Omaha, Nebraska, but it also has offices in Toronto, San Francisco, New York and London.
Buffett began his career with the company as a stockbroker back in 1951 at the age of 20. He now serves as chairman and CEO of the company.
In just one day of trading on March 3rd, 2017, Berkshire Hathaway became the largest shareholder of the world’s third-largest asset manager. The company owns about 7% of IBM shares held by investors — making it IBM’s largest shareholder.
How Does Berkshire Hathaway Make Money?
Berkshire Hathaway is a conglomerate that generates revenue from a diverse set of sources.
The company’s most valuable subsidiaries include Geico Insurance, Dairy Queen, Fruit of the Loom, BNSF Railroads, and several others.
It also owns a number of smaller companies like Precision Castparts Corp., Lubrizol Corp., and Duracell.
In terms of its stock holdings, Berkshire Hathaway has stakes in companies like American Express Company, Coca-Cola Company, Wal-Mart Stores Inc., Apple Inc., and Kraft Heinz Co.
What Are The Components of Berkshire Hathaway?
Berkshire Hathaway is a holding company with subsidiaries that span the globe. The company owns a diverse portfolio of companies, including Geico Insurance, Dairy Queen, Fruit of the Loom and BNSF Railroads.
This conglomerate has a diverse portfolio of stocks, which means it owns shares in other publicly traded companies. For example, Berkshire Hathaway owns 10 per cent of Coca-Cola’s outstanding shares and nearly 37 per cent of Wells Fargo’s outstanding shares.
In order to be a part of this index, you have to own enough stock in the index to make up at least 0.05% or more of the total stock price (or value). That’s why Berkshire Hathaway is such an important investment factor. It qualifies as one of these factors because it has grown so large over time and now makes up 1% of the total market cap.
Berkshire Hathaway is also an enormous investor in other companies through its subsidiaries. Its subsidiaries are known for their value-driven investment strategies, meaning they invest in stocks that are undervalued at the time they buy them. These values can change depending on what market conditions are like at any given time; however, they’re generally seen as a long-term investment strategy with high rewards potential because they buy when prices are low and sell when prices are high.
For this reason alone, investors should consider investing some money into Berkshire Hathaway stocks because you’ll get exposure to all sorts of different industries.
Is Berkshire Hathaway a Good Investment?
Berkshire Hathaway is a company that has a long-term, value-oriented investment strategy. This means it looks to buy companies that are experiencing an increase in their net worth and earnings per share over time.
Berkshire Hathaway also has a number of subsidiaries it owns, including Geico, Dairy Queen, Fruit of the Loom, BNSF Railroads, Fruit of the Loom and other well-known brands. It’s a very diverse company with a wide variety of holdings and investments.
The company invests exclusively in public markets and does not trade in private transactions or stocks.
However, Berkshire Hathaway is not without its risks. The company’s operations are concentrated in America–a country with growing economic inequality–and this can make it difficult for the company to deliver high rates of return on its investments.
Additionally, because it’s such a large investor in American businesses, the performance of these investments can affect the stock price more than those of other companies with more diversified portfolios would.
Which ETFs Can I Buy That Track Berkshire Hathaway?
There are a number of ETFs that offer exposure to Berkshire Hathaway. Some ETFs have more exposure than others, but each investment is different and should be considered on its own merits.
The iShares MSCI BRK.An ETF (BRKA) invests in stocks of companies that Berkshire Hathaway either owns or has a major stake in. The fund also includes some holdings of Berkshire Hathaway itself, as well as other stocks that meet the same criteria.
One thing to note about this ETF is that it’s not entirely focused on the company, because Buffett has invested in many other types of companies over the years. For example, Apple Inc., one of the world’s largest tech companies, is included in the fund’s top 10 holdings list.
Additionally, there are two other Berkshire-Hathaway-focused ETFs available for purchase:
The PowerShares QQQ Trust Series 1 (QQQ) invests only in stocks held by Berkshire Hathaway and doesn’t include any holdings outside the company’s sphere of influence. The SPDR S&P 500 (SPY) does invest in some companies outside of Berkshire Hathaway, but it does so exclusively through stocks owned by Berkshire Hathaway. These three funds represent your primary choices when considering an investment in Berkshire Hathaway stocks or an ETF tracking the company’s performance.
Should You Buy Berkshire Hathaway Stocks?
Berkshire Hathaway is a great company to invest in. It’s one of the most admired stocks on the market and is owned by high-profile investors like Bill Gates, Charlie Munger, and George Soros.
As of December 2016, Berkshire Hathaway had a market capitalization of $350 billion. That means it would take $100 bills worth of stock to equal just 1 share.
Its stock has an A+ rating from Standard & Poor’s, which means that the company has good financial health and its business model is sustainable. It also has a low 12.1% debt-to-equity ratio, which means it doesn’t have too much debt to pay back.
Berkshire Hathaway owns many well-known brands, including Geico Insurance, Dairy Queen, Fruit of the Loom, BNSF Railroads, Duracell batteries, and others. You can buy the stocks for any of those companies through Berkshire Hathaway.
There are 3 primary ways to invest in Berkshire Hathaway: buying shares directly (this is possible if you have at least $250), buying shares through a broker or investment adviser (you’ll need at least $25), or investing in an index fund (which includes Berkshire Hathaway).
Which Countries Can You Invest In Through Berkshire Hathaway?
Berkshire Hathaway is a publicly-traded company that trades on the New York Stock Exchange (NYSE). However, it isn’t listed in all countries.
On the NYSE, you can only purchase Berkshire Hathaway stock if you’re a US citizen, have a brokerage account in the US, and are willing to pay commissions for each trade.
If you’re not in the US and want to invest in Berkshire Hathaway stocks, you’ll need to look into investing through international exchange.
Some of these exchanges include Deutsche Börse AG (Euronext) and Hong Kong Stock Exchange Limited.