Berkshire Hathaway First Non-Tech Company to Hit $1 Trillion

August 30, 2024

Berkshire Hathaway, led by Warren Buffett, made history by becoming the first non-technology company to reach a market value of $1 trillion, on August 28. This achievement came after a key decision to sell nearly half of its shares in Apple, which helped the company build up a huge cash reserve of $280 billion.

Career Beginnings

Buffett started his career as an investment analyst, first working at his father’s firm and later at Graham-Newman Corp., where he further honed his investment skills. By the age of 30, he had already become a millionaire, showcasing his talent for making smart investment decisions. In 1965, he co-founded Berkshire Hathaway with Charlie Munger, who would become a key partner in his investment journey.

Value Investing Philosophy

Buffett is a strong believer in value investing, a strategy he learned from his mentor, Benjamin Graham. This approach involves finding undervalued stocks, meaning they are priced lower than their true worth. Value investors like Buffett look for opportunities where the market has overlooked the potential of a company, aiming to buy these stocks and hold onto them for long-term gains.

Diversification Strategies

Berkshire Hathaway originally started as a textile manufacturing company, but Buffett soon realized that this industry had limited growth potential. He decided to diversify the company’s investments by buying businesses that were temporarily struggling but had strong foundations. Some of these businesses include well-known names like GEICO, Coca-Cola, and Duracell.

Investment Principles and Approach

Buffett’s approach to investing is disciplined and straightforward. He categorizes investment opportunities into three groups: “yes,” “no,” and “too tough to understand.” For a long time, he stayed away from technology stocks, believing they were difficult to predict. However, he later changed his view when he saw the strong market position of companies like Apple, which he now considers to have a strong competitive advantage, or a “moat.” Warren Buffett’s success is built on a combination of value investing, smart diversification, and a long-term vision. These principles have helped make Berkshire Hathaway one of the most valuable companies in the world.

About Berkshire Hathaway

Founded in 1839, Berkshire Hathaway began as a textile manufacturing company. Warren Buffett took control of the company in 1965 and has since transformed it into a massive conglomerate. Headquartered in Omaha, Nebraska, Berkshire Hathaway owns companies like GEICO and Duracell. The company is known for its decentralized management style, allowing each subsidiary to operate independently. Berkshire’s annual shareholder meetings are famous, drawing thousands of attendees and resembling a festival. The company focuses on long-term investments and intrinsic value, with its “A” shares often valued at over $500,000 each. Additionally, Berkshire Hathaway is recognized for its strong commitment to philanthropy.

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