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🦅 Berkshire Hathaway Inc.: Complete Story & Full Historical Overview
A refined, high-impact look at the legendary empire built by Warren Buffett and Charlie Munger—one that reshaped global investing through discipline, rationality, and unrivaled compounding.
1. Introduction: Understanding Berkshire Hathaway
Berkshire Hathaway Inc. is a U.S.-based multinational conglomerate headquartered in Omaha, Nebraska.
Guided by Warren Buffett—widely known as the Oracle of Omaha—and his long-time partner, Charlie Munger, the company controls dozens of subsidiaries and holds major long-term stakes in some of the world’s most influential corporations.
Today, Berkshire is celebrated as the most successful long-term compounding machine in financial history.
2. Origins: From Textiles to Titan
2.1 Birth of Berkshire (1839–1950s)
The company’s roots trace back to Valley Falls Company, a textile manufacturer founded in 1839.
A series of mergers with Berkshire Cotton and Hathaway Manufacturing ultimately formed Berkshire Hathaway, but the textile business steadily declined as overseas competition grew.
2.2 Buffett Takes Over (1962–1965)
Buffett initially purchased shares as a value play.
After disagreements with management, he acquired control in 1965, unknowingly stepping into the role that would build one of the world’s greatest conglomerates.
3. Reinvention: The Shift to a Holding Company
Realizing textiles were dying, Buffett halted expansion and redirected capital into higher-return sectors:
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Insurance
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Banking
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Media
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Utilities
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Railroads
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Manufacturing
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Consumer goods
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Public equity investments
A transformational moment came when Berkshire bought GEICO. This acquisition opened the door to an investing superpower: float.
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4. The Power of Insurance Float
Insurance premiums arrive long before claims are paid, creating a pool of investable funds known as float.
Buffett used this float to invest—effectively accessing capital at zero cost.
Key insurance operations include:
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GEICO
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National Indemnity
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Berkshire Hathaway Reinsurance Group
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Berkshire Hathaway Primary Group
Float rose from $39 million in 1970 to $150+ billion today, fueling Berkshire’s expansion for decades.
5. Berkshire’s Most Important Subsidiaries
Berkshire owns 60+ companies across every major industry. Notable 100%-owned businesses include:
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BNSF Railway — U.S. freight rail giant
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Berkshire Hathaway Energy (BHE) — Utilities & renewable power leader
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GEICO — Auto insurance powerhouse
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Precision Castparts — Aerospace manufacturing
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Duracell — Battery technology
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See’s Candies — Model of high-margin retail
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Fruit of the Loom — Apparel manufacturing
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Dairy Queen — Global quick-service food
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Lubrizol — Specialty chemicals
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Shaw Industries — World-leading flooring
Together, these companies generate tens of billions in annual earnings.
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6. The Berkshire Stock Portfolio
Berkshire’s equity portfolio includes some of the most iconic investments in modern history.
6.1 Apple Inc.
Berkshire’s largest investment ever—considered Buffett’s “third pillar” after GEICO and BNSF.
6.2 Coca-Cola
Purchased in the late 1980s, now a classic example of patient compounding.
6.3 American Express
Held for over 50 years.
6.4 Bank of America
One of Berkshire’s biggest financial bets.
6.5 Moody’s
A long-term winner in financial analytics.
Other historical holdings include: Wells Fargo, IBM, Chevron, Occidental Petroleum, BYD, Kraft Heinz, Goldman Sachs, and more.
7. Philosophy: The Berkshire Way
Buffett and Munger built Berkshire on a simple, timeless framework:
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Buy exceptional businesses at fair prices
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Hold for decades, not months
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Keep debt low
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Let compounding work
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Invest within your circle of competence
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Ignore market noise
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Think independently
Berkshire famously avoids:
✔ Stock splits
✔ Quarterly earnings guidance
✔ Short-term speculation
This discipline created a culture unlike any other in corporate America.
8. Charlie Munger’s Intellectual Blueprint
Charlie Munger transformed Buffett’s early investing style, pushing him beyond “cigar-butt” bargains to high-quality businesses with durable competitive advantages.
His core principle:
“A great business at a fair price is superior to a fair business at a great price.”
His multidisciplinary thinking—drawing from psychology, economics, mathematics, and philosophy—became a foundational part of Berkshire’s DNA.
9. The Modern Berkshire Hathaway
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Today, Berkshire is:
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A $800+ billion global conglomerate
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One of the most valuable companies on the planet
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A highly diversified group of decentralized businesses
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A fortress of financial strength and liquidity
Its primary divisions:
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Insurance & Reinsurance
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Railroads (BNSF)
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Utilities & Energy (BHE)
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Manufacturing
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Service & Retail
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Distribution & Consumer Brands
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Public Equity Portfolio
Few companies match its breadth, discipline, or resilience.
10. Succession: The Next Generation of Leadership
With Buffett in his 90s, Berkshire’s succession plan is clear:
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Greg Abel — Future CEO, oversees non-insurance operations
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Ajit Jain — Head of global insurance operations
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Todd Combs & Ted Weschler — Berkshire investment managers
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Howard Buffett — Expected non-executive Chairman
The structure is designed to preserve Berkshire’s culture long after Buffett.
11. Legacy: The Ultimate Wealth Compounder
Berkshire Hathaway’s transformation—
from a struggling textile mill to the world’s most admired conglomerate—
is one of the most extraordinary stories in business history.
It stands as:
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A monument to long-term thinking
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A masterclass in capital allocation
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A blueprint for rational investing
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A model of corporate integrity
Disclaimer : The content on this blog is for informational purposes only and does not constitute financial, investment, tax, or legal advice. I make no guarantees about the accuracy or completeness of the information provided. You are responsible for your own financial decisions—always consult a qualified professional before acting on any information from this site. I am not liable for any losses or damages resulting from the use of this blog.
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