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Writer's pictureIshfaaq Peerally

How Warren Buffett's Berkshire Hathaway Makes Money


Berkshire Hathaway is more than just Warren Buffett investing in the stock market. In fact, most of the money that Berkshire Hathaway makes is not from the stock market.

Berkshire Hathaway is the fifth largest company in the world by market capitalization and it employs 377 000 people. Berkshire Hathaway is the second most profitable company in the world just after Apple. Warren Buffett is CEO and Chairman while Charlie Munger is Vice Chairman of Berkshire Hathaway.

Structure of Berkshire Hathaway: 1. Insurance and Reinsurance - GEICO - Berkshire Hathaway Re Group - Berkshire Hathaway Primary Group 2. Railroad Business Burlington Northern Santa Fe (BNSF) 3. Utilities and Energy business 4. Manufacturing Business 5. Consumer Products 6. Services and Retailing 7. Retailing Business 8. Finance and Financial Products

Only about 3% of revenue comes from stock investing (capital gain, dividends, interest) and the stock portfolio accounts to only 40% of the book value.

Portfolio: 1. Apple 2. Bank of America 3. Well Fargo 4. Coca Cola 5. Kraft Heinz 6. American Express 7. Others

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