Disclosure: This blog is not intended to be financial or investment advice. We recommend you consult with your financial professional to discuss your specific needs in the context of your long-term financial plan. Past performance is not indicative of future results.
Berkshire Hathaway is one of the largest and most successful companies in the world. In 1965, Berkshire was acquired by legendary investor Warren Buffett, known to many as the Oracle Of Omaha.
Today, 55 years later, Berkshire Hathaway is a global conglomerate comprising dozens of private companies, billions in publicly-traded equities, and a CEO approaching his 93th birthday.
So much has been written about Warren Buffett’s investment strategy; we’d like to highlight 3 of Berkshire’s most unique qualities.
- He’s a Disciple of Benjamin Graham who literally wrote the book on “value investing.”
The premise of value investing is to apply fundamental analysis to identify the true worth of a business, and depending on “Mr. Market”, BUY when the price is LOW, and SELL when the price is HIGH. This simple philosophy has been applied by Buffett and Berkshire time and time again to great success.
- Buffet Blocks Out the Noise
“OUR FAVORITE HOLDING PERIOD IS FOREVER.” – Warren Buffet
Warren’s favorite holding period is forever; he is not a day trader, nor trying to predict Federal Reserve policy. What matters to Buffett is a company’s financial performance relative to its competition over time. If a company can dominate their specific industry, maintain a pristine balance sheet and healthy margins, it will likely succeed over time.
- Berkshire is committed to strong corporate governance
From Buffett’s point of view, a key ingredient to a company’s success is the quality of its people. As a decentralized business, Berkshire Hathaway acquires successful companies with world-class management already in place. Warren reviews their financial results on a periodic basis, and otherwise gets out of the way and allows Berkshire’s executives to shine.
As a CEO, Warren Buffett is not in search of the limelight. He lives in Omaha and eats breakfast at McDonald’s. He stays out of Twitter fights, and doesn’t own a professional sports team. He does, however, fly on a private jet… but we’ll forgive him for that!
Related to reporting, Berkshire’s reporting to shareholders is second to none. He provides easy-to-read shareholder letters, organizes an extraordinary shareholder’s annual meeting, and he’s very honest about his mistakes.
In Summary
Few investors in the world have been able to accomplish a fraction of what Warren Buffett has amassed. He has successfully invested across a wide range of sectors and industries, all while maintaining a lean corporate structure over the years. Berkshire’s long-term philosophy, transparency, and commitment to their shareholders over the years has proven to be an oasis amidst the greed and volatility that pervades the market.
The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.