Since 1965, Berkshire Hathaway has delivered an average annual return of almost 20% to its shareholders, compared to 10% for the S&P 500.
When you see that, you want to invest in this company even if past performance is not indicative of futur results.
Why would you not invest in this company ?
When you see the numbers...
- Berkshire Hathaway is the 7th largest market capitalization, behind Nvidia, with a valuation of $790 billion. (In comparison, BlackRock, well-known to the general public, has a market capitalization of $105 billion.)
- Berkshire Hathaway achieved $302 billion in revenue in 2022, a 9.37% increase from 2021.
- BH has over $73 billion in cash reserves.
- It holds stakes in companies like Coca Cola, Bank of America, and notably Apple, of which they own over 5%. It is basically an ETF (without dividends)
Warren Buffett is one of the world's best fund managers. He has some basic principles that we should all use:
- Invest only in businesses you understand, with favorable long-term prospects, led by competent management, and at reasonable prices.
- Look for a long-term competitive advantage in a stable industry.
- Seek exceptional companies at reasonable prices, not mediocre companies at bargain prices.
The Risks I see:
- The company's past performance has been incredible, but its current size will inevitably slow down its performance.
- Warren Buffet is 93 years old. What is going to happen to BH when he die ? Even that seems ok: It's known that Howard Buffet will be the future Chairman and Greg Abel the future CEO when Warren is no longer around. Greg Abel shares the same basic principles of management and investment as Warren Buffett.
- Lastly, Warren Buffet is not exposed to Green and ESG (Environmental, Social, Governance) topics. Some consider him outdated in this regard.
Submitted September 06, 2023 at 03:39AM by Diligent-Ear-1790 https://ift.tt/w1k6Xp7
