Berkshire Hathaway (NYSE: BRKA, NYSE: BRKB) is a large holding company headquartered in Omaha, Nebraska, USA, that oversees and manages a number of subsidiary companies. Berkshire Hathaway's core business is insurance, including property and casualty insurance, reinsurance and specialty nonstandard insurance. The Company averaged a phenomenal 25%+ annual return to its shareholders for the last 25 years while employing large amounts of capital and minimal debt.
The company is controlled by Warren Buffett, who is one of the most celebrated investors in history and the second-richest man in the world according to Forbes magazine. Buffett has used the "float" provided by Berkshire Hathaway's insurance operations (a policyholder's money which it holds temporarily until claims are paid out) to finance his investments. In the early part of his career at Berkshire, he focused on long-term investments in publicly quoted stocks, but more recently he has turned to buying whole companies. Berkshire now owns a diverse range of businesses including candy production; retail, home furnishings, encyclopedias, vacuum cleaners, jewelry sales; newspaper publishing; manufacture of and distribution of uniforms; and manufacture, import and distribution of footwear.
Berkshire's Class A shares sell for over $100,000 a piece, making them the highest-priced shares on the New York Stock Exchange. This is because they have never had a stock split. On October 23, 2006 shares closed at $100,000 for the first time. 1
Berkshire's CEO, Warren Buffett, is respected for his investment prowess and his deep understanding of a wide spectrum of businesses. His annual chairman letters are read and quoted widely.
As of 2005, Buffett owns 38% of Berkshire Hathaway. Berkshire's Vice-Chairman Charlie Munger also holds a stake big enough to make him a billionaire, and early investments in Berkshire by David Gottesman and Franklin Otis Booth resulted in their becoming billionaires as well.
Berkshire Hathaway is notable in that it has never split its shares, which not only contributed to their high per-share price but also significantly reduced the liquidity of the stock. But despite its size, it is not included in broad stock market indexes such as the S&P 500. However, Berkshire Hathaway has created a Class B stock, with an ownership value of 1/30th of that of the original shares (now Class A) and 1/200th of the per-share voting rights. Holders of Class A stock are allowed to convert their stock to Class B, though not vice versa.
Buffett was reluctant to create the Class B shares, but did so to thwart the creation of unit trusts that would have marketed themselves as Berkshire look-alikes. As Buffett said in his 1995 shareholder letter:
"The unit trusts that have recently surfaced fly in the face of these goals. They would be sold by brokers working for big commissions, would impose other burdensome costs on their shareholders, and would be marketed en masse to unsophisticated buyers, apt to be seduced by our past record and beguiled by the publicity Berkshire and I have received in recent years. The sure outcome: a multitude of investors destined to be disappointed."
Berkshire's annual shareholders' meetings, taking place in the Qwest Center in Omaha, Nebraska, are routinely visited by 20,000 people.1 The meetings, known for their humor and light-heartedness, typically start with a movie made for Berkshire shareholders. The 2004 movie featured Arnold Schwarzenegger in the role of 'The Warrenator' who travels through time to stop Buffett and Munger's attempt to save the world from a "mega" corporation formed by Microsoft-Starbucks-Wal-Mart. Schwarzenegger is later shown arguing in a gym with Buffett regarding Proposition 13.2 The 2006 movie depicted actresses Jamie Lee Curtis and Nicollette Sheridan lusting after Munger.
Insurance and finance subsidiaries
GEICO
General Re
Kansas Bankers Surety Company
National Indemnity Company
Wesco Financial Corporation
Applied Underwriters Inc.
Medical Protective
Other subsidiaries
Xtra Lease
Borsheim's Fine Jewelry
Dairy Queen
Fruit of the Loom
Nebraska Furniture Mart
Jordan's Furniture
The Pampered Chef
See's Candies
World Book
FlightSafety International
Forest River
Business Wire
Russell Corporation
ISCAR Metalworking
TTI Inc.
Mouser Electronics
Clayton Homes
see more: http://en.wikipedia.org/wiki/Berkshire_Hathaway