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Case Study example - Institutions of Warren Buffet
Pages 5 (1255 words)
The funds / institutions being examined is Berkshire Hathaway Inc. (Berkshire) group of companies. This particular institution has been chosen as Mr. Warren Buffet is its Chairman of the Board and Chief Executive Officer. He has been an officer in it since 1965 i.e…
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These subsidiary companies are engaged in a wide range of business activities. The main ones are primary insurance and reinsurance business.
Over the years it has acquired a myriad of subsidiaries engaged in diverse business operations like utilities and energy (MidAmerican Energy Holdings Company), manufacturing-service-retailing (Marmon group), wholesale distribution & logistics (McLane), jewelry (Ben Bridge Chain), carpets (Shaw Industries), bricks & boots (Justin Industries). The insurance (both primary and reinsurance) business is through more than sixty national and overseas enterprises.
Berkshire being primarily in insurance business in effect means that the premium for undertaking risk generates cash which is available for investment when the opportunity knocks. The reputation of Mr. Buffet has been built over the years is due to the fact that he has been consistent in picking winning opportunities by and large. This translates into the fact that almost of the business acquisitions turn out to be profit making ones, which in turn swell the coffers of Berkshire to be ready to invest.
Contrary to expectations and common belief, Berkshire does not invest by only trading in stock i.e., picking stock at low price and selling, but also by investing in the businesses and earning through their operations.
"For some sellers Berkshire is a refuge, a place to land when, say, some members of a family that contr ...
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