Abstract This paper analyzes Berkshire Hathaway Inc. It provides an overview of the company and discusses its financial status, recent allocation of profits and corporate performance over the last five years. It discusses the company's capital structure, areas of business and multiple stock classes. The paper then discusses the ownership structure and investors of the business.
Table of Contents:
Berkshire Hathaway Overview
How Berkshire Hathaway Makes Money
Financial Status, Recent Allocation Of Profits And Corporate Performance Over The Last Five Years
Berkshire Leverage And Capital Structure
Areas Of Business And Respective Profits
Multiple Stock Classes
Ownership Structure Of Berkshire Hathaway
Return To Investors
Key Personnel/Managers Of The Business
Risks Of The Firm That Could Lead To Material Change In Performance
From the Paper "Warren Buffett is 77 years old and plays a crucial role in Berkshire Hathaway - he allocates all Berkshire's 127 billion dollars. He is the figurehead for the company who exudes a sense of stability and dictates company culture. His age is of concern although he is in good overall health. No one has quite been able to replicate him even though many have tried. He will be a very difficult person to replace. Upon Warren's death, his job will be split into two parts with one executive becoming responsible for investments and the other who will be CEO in charge of operations. Charlie Munger is 83 years old and in worse health condition than Warren. Charlie will also be a difficult member to replace."
Abstract Berkshire Hathaway is one of the most interesting cases of successful investments. Under the inspirational leadership of Warren Buffett, the company's evolution is a great object of study for both scholars and investors. This paper explores the key points in Berkshire's history, Buffett's influence, how the company's structure was built, what is its current financial status and whether an investor should consider buying its stock.
From the Paper "In a 1999 article from Business Week, Warren Buffett, the force behind the Berkshire Hathaway Business, was described as follows: "If Buffett had a business card, it would identify him as chairman and chief executive of Berkshire Hathaway Inc. But he is far better known--indeed, world-famous--as the greatest stock market investor of modern times. The figures, though often cited, still astound: Had you put $10,000 into Berkshire when Buffett bought control of it in 1965, you'd have $51 million now, vs. just $497,431 if the money were invested in the Standard & Poor's 500-stock index." "
This paper explores the issue of mergers and acquisitions as related to Berkshire Hathaway in terms of financial strategy, corporate governance and ethical issues.
Abstract This paper explains that firms like the holding company Berkshire Hathaway often seek to acquire other companies rather than build a separate business from the ground up. The author points out that mergers and acquisitions are concerned primarily with long-term growth because the process of acquiring another firm is often capital intensive. The paper relates that other reasons for acquisitions are a desire for synergistic effects, increased revenue or market share, cross selling, economies of scale and tax benefits. The paper relates that, by acquiring significant portions of companies from varying industries, the holding company Berkshire Hathaway has become one of the largest firms in the country, the most expensive security on the New York Stock Exchange and one of the largest conglomerates in the history of business.
Table of Contents:
Acquisitions
Financial Strategy
Corporate Governance and Ethical Issues
Financial Situation Prior to Acquisition
Financial Situation after Acquisition
Successful or Not
Conclusion
From the Paper "When one firm is acquired by another, there are some predictable short-term effects on the acquiring firm's stock price. Though not always true, typically the acquiring firm's stock price will fall; whereas the target company's stock price will rise. An explanation for the acquirer's drop in stock price is the fact that a premium is usually paid for the target firm's stock. Without a premium above the market rate, there is little incentive for shareholders to part with their holdings. The same reason applies to why the stock price of the target firm increases--a premium is being offered."
Abstract This paper examines how Warren Buffett, known as the 'Oracle' or the 'Sage of Omaha,' is generally considered to be one of the world's most successful investors. It looks at how Berkshire Hathaway, the company he used as an investment vehicle, is now legendary for its achievements and explores some of his investment principles.
From the Paper "The second role Berkshire Hathaway played was extremely important for Buffett's success. In 1967 he turned his attention towards the insurance business and purchased two Nebraska companies, National Indemnity and National Fire and Marine Insurance. The insurance business was risky, under permanent competition stress and in constant need of excellent management. Buffett was coming from a traditional sector of the economy, textiles, but the new challenge proved to be exactly what he had needed. The new opportunity gave him the chance to put his full potential to the test and to apply all the investment strategies that have made him famous."
Abstract In late May, 1998, Microsoft founder and CEO Bill Gates (the richest businessman in the world) and Warren Buffett, chairman of Berkshire Hathaway Inc. (the richest investor in the world) gave a special speech (to be aired by PBS this fall) about competition in American business in general and the computer industry in specific.
From the Paper "Microsoft and the Anti Trust Issue
Introduction
In late May, 1998, Microsoft founder and CEO Bill Gates (the richest businessman in the world) and Warren Buffett, chairman of Berkshire Hathaway Inc. (the richest investor in the world) gave a special speech (to be aired by PBS this fall) about competition in American business in general and the computer industry in specific. At one point, the moderator asked what was the appropriate role for antitrust law in American business? Gates answered that the essential role of competition law is to "protect consumers and to make sure that new products get created and that those products are very innovative" (Schlender, Buffett & Gates, 1998, 48). From Gates' point of view, there were serious antitrust violations in the computer industry before ..."
Abstract This paper explains that, at the beginning of George Orwell's "Animal Farm", Napoleon is nothing more than a normal pig; his day is dictated by Mr. Jones, the farmer and Napoleon's owner; but, after Major makes his speech about a revolution, Napoleon begins a transformation from normal pig to a pig, which cannot be distinguished from humans. The author points out that, although his dynamic transformation is not a quick overnight change, its progress can be tracked through the novel at specific points starting when Napoleon and Snowball organize Major's thoughts into animalism;at this time, Napoleon establishes many of the doctrines that he himself will later alter or violate. The paper relates that, when the revolution begins, Napoleon will not communicate with any two-legged creature; but, by the end of the novel, Napoleon not only talks to them but also cannot be distinguished from them.
From the Paper "Later in the novel, Napoleon begins to invite some of the neighboring farmers over to the farmhouse, where Napoleon now sleeps - another violation of the commandments. He also drinks alcohol occasionally, he wears clothes, and he walks on two legs - violations of the commandments, making Napoleon into an enemy. Napoleon says that he is discussing farming techniques as well as other discussions that deal with the running of the farm. Napoleon shows his dynamic characteristics again at this time because at the beginning of the story Napoleon aids in driving Mr. Jones out of the farm, and now he invites humans onto the farm to eat and discuss techniques. "Napoleon is the consummate power monger, who, not surprisingly, becomes a reinvention of Mr. Jones." "
Tags: owner, humans, transformation, animalism, communication
Abstract An overview of how Bill Gates, Warren Buffet, and Paul Allen became the three richest men in America. The paper looks at how they achieved their wealth and factors leading to their success.
From the Paper "This is the sum total of the three men that top the Forbes Richest People in America list for CNN Money. How did these men achieve this kind of wealth? What did they do to become the giants of the business world? Bill Gates and Paul Allen got their start in computers on a teletype machine at Lakeside Preparatory school in their hometown of Seattle Washington ..."
Tags: Bill Gates: Warren Buffet: Paul Allen: Microsoft: Berkshire Hathaway, Forbes: wealth
Abstract This paper discusses the leadership approach of Warren Buffet. The paper looks at Buffet's background and the way that he first became involved in buying shares. It then discusses his leading by example and his philosophy of remaining very much a part of all of the companies that he acquires and how his philosophies have changed over time. The paper concludes by describing Buffet's characteristics that we can learn from, in order to be successful.
From the Paper "Through his leading by example and his philosophy of remaining very much a part of all of the companies that he acquires, Warren Buffet has modeled the dedication that he expects others to reflect. Consistency has been a pillar in Buffet's actions. Though he is known world wide as an investment genius, Buffet does not comment on his current holdings. He does not want to cause artificial inflation of his stock, nor does he want to leave the public expecting pronouncements on his holdings. He has remained focused on compiling strong stock holdings for his investors, which has lead to the immense success of Berkshire Hathaway. The example that Buffet has set is not easily attained, but it sets a strong president to those that wish to succeed."
Abstract In this article, the writer points out that Warren Buffett is an acknowledged leader in business and investing. The writer explains that Buffet has worked at Berkshire Hathaway for nearly five decades and led it to great, even astounding, success. The writer notes that his ultimate philosophy that customers should conduct themselves like owners of the company, forms the backbone of his ideology and ultimately his success. The writer notes that Buffett's success has led others to emulate his business model, some of which is described in the book 'The Real Warren Buffett'. The writer concludes that other managers, no matter what industry they serve, would do well to follow Buffett's models and methods.
From the Paper "Warren Buffett developed his role as a manager in the 1960s, after he had already spent 20 years as a successful stockbroker. Buffett believed to be a successful manager he should treat the business as his own, even if he was not the owner. He knew to do this; the ideas of management would have to change to reach this goal. He also knew he had to choose the right investments that would over the greatest gain and the least risk, just as if he were using his own money to invest. He decided to create a guarantee that assured his shareholders that their money would be returned to them if he could not give them a higher return than they could earn somewhere else. He also knew the people he managed would have to adhere to the same goals."
Abstract The paper utilizes J.M Kouzes and B.Z. Posner's framework of leadership to consider the leadership qualities and leadership style of Warren Buffett of Berkshire Hathaway and other corporations. The paper describes Buffett's childhood and entry into the business world. The paper explains Buffett's methods and his philosophy of how to value an investment.
From the Paper "Buffett was born in 1930. As a child, Buffett already showed himself to be ambitious--he was an enthusiastic and industrious paper boy for the Washington Post, trying to cover more than one route at the same time, and he also made money by collecting and selling lost golf balls. His interest in finance was also apparent extremely early in his life when he started playing the stock market with one of his sisters when he was eleven. When he was twelve, he was betting on horses, and by high school he had started a business (pinball machines) with a friend, a business which earned him fifty dollars a week. By graduation, he not only owned his own business, but he also had purchased forty acres of Nebraskan farm land with his profits."
