Business Description
Berkshire Hathaway (BH) is a holding company with many subsidiaries engaged in diverse activities. The firm's core business segment is insurance, run primarily through Geico, BH Reinsurance Group, and BH Primary Group. Berkshire has used excess cash from its other operations over the years to acquire Burlington Northern Santa Fe (railroad), BH Energy (utilities and energy distributors), and the firms that make up its manufacturing, service, and retailing operations (which include five of Berkshire's largest noninsurance pretax earnings generators: Precision Castparts, Lubrizol, Clayton Homes, Marmon, and IMC/ISCAR). The conglomerate is unique in that it is run in a decentralized fashion.
Final Thoughts
It’s important to avoid minimizing BRK as an actively managed index.
The conglomerate is painstakingly built over 50 years by two of the world’s greatest investors, hundreds of families and thousands of employees.
It has a track record of unparalleled value creation, enviable balance sheet strength, a unique decentralized culture and capable management at the helm - even after Buffett and Munger leave the scene.
Berkshire Hathaway is made of a great many living, breathing, cash-generating businesses. Most of these excel as individual businesses, and benefit in several ways from their BRK parenthood.
At a 10% discount today, BRK deserves a stalwart position in a long-view, buy-and-hold portfolio.
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