Warren Buffett is a legendary investor who now sits at the CEO position as well as Chairman and President of the multibillion dollar corporation known as Berkshire Hathaway. For convenience I will refer to Berkshire Hathaway as BH. BH is a conglomerate holding company which means that they specialize in investing across several different industries. Yahoo! Finance defines BH to be in the financial sector and their primary industry as Property and Casualty Insurance. Some of the other companies that BH owns and manages are GEICO Insurance, Helzberg Diamonds, Benjamin Moore & Co., and Dairy Queen. BH also owns large portions of stock in Heinz and Mars Incorporated. Due to the present day’s stock market volatility there would be no other better choice than to buy into Berkshire Hathaway.
What most people fail to realize about BH is that it is involved in so many well-known companies but is hidden behind the scenes of many of these companies such as Wells Fargo (WFC.) At WFC the BH holding value is set at $21.38 billion and its stake in the company is valued at 8.8%. Along with this, BH also holds $13.49 billion of American Express, which translates to owning 14.3% of American Express. Another big company that BH is involved with is International Business Machines (IBM.) BH is responsible for having a 6.3% stake in the company, in addition to having a holding value of $12.51 billion. Besides owning percentages of different multibillion-dollar corporations, they also own a large amount of companies. As mentioned before they own companies such as GEICO insurance, which is an indirect, fully owned subsidiary of BH. The difference with indirect fully owned subsidiaries is that BH is the owner entirely of these companies. W...
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... he prioritizes the company’s success before his own success. If he has not done this, the shareholders would have voted him out a while ago. This just proves that Warren is doing an excellent job at leading BH. Disregarding the statistics and numbers mentioned above, just knowing that the CEO is Warren Buffett is a good enough reason to buy into the company. You are nearly guaranteed a return from this powerhouse of a company. If you want to make money in the stock market and do it with low risk and high steady returns, then I wouldn’t advise you to buy any shares from any company besides those of Berkshire Hathaway.
Works Cited
http://www.etrade.com
http://www.finance.yahoo.com
http://www.marketwatch.com
http://www.berkshirehathaway.com/compab.pdf
http://www.investopedia.com/terms/b/boardoftrustees.asp
http://www.cnbc.com/id/33608379/page/13
1. I am asked to compute the before-tax Net Present Value or NPV of a new ski lift for Deer Valley Lodge and advise the management there of the profitability. Before I am able to make this calculation there are a few calculations that I will need to make first. First the total amount of the investment, this will be the cost of a lift itself $2 million plus the cost of preparing the slope and installing the lift $1.3 million.
Target, the nation's #2 discount chain, now operates more than 1,500 Target and Super Target stores in 47 states, as well as an online business called Target.com. Target and its larger grocery-carrying stores, Super Target, have carved out a niche by offering more upscale, fashion-forward merchandise than rivals Wal-Mart and Kmart. After years of struggling to turn around its Marshall Fields and Mervyns departments stores divisions, the discounter sold them both in 2004. Target also owns apparel supplier The Associated Merchandising Corp. and issues Target Visa and its proprietary Target Card (www.Answers.com/topic/target-corporation).
Apple Computer Inc designs, manufactures, and markets personal computers and related personal computing and communication solutions. The return of Steve Jobs, the companies founder, as CEO has pulled the company’s stock price up 775-percent through his launch of innovative products such as the iMac computer line. On January 5, 2000, Jobs announced that he was dropping interim from his CEO title and taking the job full-time. With this news and Apple’s new products such as the iBook, a portable pc and Quick TV, an internet television access feature, Apple Computer is headed for success and is sure to increase their share in the computer market.
Walmart stakeholders like every brick and mortar retailer were concerned with the Amazon apocalypse as more and more retail stores were closing from Target to Macy’s to Sears and thousands of employees lost their jobs. That fear led a lot of traders to hold Walmart stock on short interest as they though that Walmart is going down too as Amazon was a major concern on many stakeholders’ minds from suppliers to customers to investors to banks. However, Walmart adapted to the new game and excelled.
Growing up, kids have high aspirations and believe that they can do anything. Often kids say they want to be a fireman, an astronaut, or other heroic jobs that they seem to be fascinated on. This though was not the case for Warren Buffett. From Buffett himself, he states:
Since January 31, 2004, the investment banker for Wal-Mart has been Moody's investor services. Wal-Mart plans to refinance for their long term dept with Mood's Investor Services and also a few other investment banking for other corporate purposes that are not mentioned. Wal-Mart also plans to bowwow 3.3 billion dollars and an additional 1.1 billion for commercial paper By January 31, 2004 the, Wal-Mart had already established a 5.1 billion dollar lines of credits from 77 different banking industries and investment and used up approximately 145 million in the production of commercial paper. During the same time period Wal-Mart had 6 billion dollar debt of securities under a shelf registration regulation which derived from the SEC. Wal-Mart sold 1.25 billion in notes and maturity. The notes bear an interest of 4.1.25 % and mature by February 2011. The total quantity of notes allowed to be sold to is up to 4 billion.
General Electric Company (GE) is a diversified technology, media and financial services company. With products and services ranging from aircrafts engines, power generation, water processing and security technology to medical imaging, business and consumer financing, media content and industrial products, it serves in more than 100 countries. This analysis will use financial ratios to see just how GE is performing as a Fortune 500 company.
1994 is a sharp increase, but even if the growth rate for 1994 is not
Accounting profit can serve as an alternative to intrinsic value. But Buffett states that “...we do not measure the economic significance or performance of Berkshire by its size; we measure by per-share progress.” Accounting reality was conservative, backward looking, and governed by GAAP (measures in terms of net profit), therefore Buffett rejects this alternative. According to the world’s most famous investor, investment decisions should be based on economic reality, not on accounting
At $36.00 (cash) per share, it is $4.00 higher than Meadowbrook Lane’s offer of $32 (cash) per share. With Ben & Jerry’s current stock price at $21.00, the $36.00 offer would result in a $15.00 gain on each share, for the shareholders. Looking at the market capitalization of Ben & Jerry’s and Unilever, shows a stark contrast in company size (see Market Cap. Excel). Ben & Jerry’s market capitalization is valued at $158,801,769 or .88% of Unilever’s $18 billion market capitalization, which is the largest of any of the offering
Warren always wanted to be financial independent, working for himself and find a job where he would admire the people he is working with (Athanassakos). Following Graham’s value investing strategy, Warren bought the majority of Berkshire Hathaway stocks and took the position of Chairmen of the Board and CEO at Berkshire Hathaway (Smith). His investment philosophy and healthy leadership brought Berkshire Hathaway back on its feet and started a completely new era. Warren transformed this textile mill into a worldwide conglomerate, with revenues of over 162 billion dollars per year. Famous franchises, like Dairy Queen, Fruit of the Loom, automobile insurance GEICO, or Net Jets are daughter businesses of Berkshire Hathaway, all under the ownership of Warren Buffett
As described above, he is a hands-off type of manager. With the laissez-faire type of management, leaders provide little guidance, followers have the freedom to make decisions, needed resources are available, and followers are expected to solve problems (psu.edu, 2013). This style of leadership can best be related to the transformational style. According to pachamama.org (n.d.), transformational leaders delegate tasks, they are concerned with ideas over process, and they are inspirational, trustworthy, and strong role models, which Warren Buffett seems to fit the bill. Furthermore, Hay (n.d.) states that transformational leadership brings higher levels of personal commitment and high expectations, again, to which Buffett seems to follow suit in the way his companies are
Investors who wish to purchase shares of Berkshire Hathaway stock may choose from class A shares (BRK-A) or class B shares (BRK-B), explains Investopedia. However, class A shares of Berkshire Hathaway cost over $200,000 per share, as of 2015. Class B shares cost 1/1,500 of class A shares allowing investors to buy a portion of Berkshire Hathaway’s portfolio. Warren Buffett, the famed billionaire investor, is the chairman of Berkshire Hathaway.
In 2014 comedian, Nathan Fielder opened a coffee shop in Los Angeles that he called Dumb Starbucks. Both Starbucks and Dumb Starbucks are not affiliated however, Fielder used Starbucks' famous trademark and placed "Dumb" in front of it. He also mimicked their menu but placed the word "dumb" in front of every product. The shop caused something of a media stir when the News media reported on the opening of Dumb Starbucks and it gain recognition and publicity. Dumb Starbucks and the baristas gave away free coffee until they ran out. Some individuals reportedly waited an hour, if not three hours for a free cup of coffee from Dumb Starbucks. "There were also "dumb" versions of the CDs sold at [Dumb] Starbucks" (Lee). Dumb Starbucks was only open
... the economy as a whole; it keeps the cycle of money flowing, investing in companies to fuel growth. When an intermediary grows as large as Berkshire ($113 billion market cap), caution must be placed on where the money is flowing. It can be easy for the intermediary to flirt with becoming a monopoly on certain markets or sectors due to the influx of investments and percentage of ownership. During an economic rebound, it is often easy to follow large intermediaries and expect them to “turn the tide” and drag the economy out of the slump. The danger arises when people begin to expect the silver bullet approach and start to focus solely on these large institutions; having this tunnel vision does not always allow for the fastest growth and/or recovery. Overall, with all aspects considered, Berkshire Hathaway as an intermediary is beneficial to the overall economy.