Why Buffett's Berkshire Hathaway Is Still A Great Long-Term Holding
Summary
- Berkshire is the #8 stock in the S&P 500 and #1 in the S&P Value Index; it's a highly diversified conglomerate with a large position in Apple.
- Berkshire's business model is unique, with decentralized operational management and centralized capital allocation; its Big Four businesses are insurance/reinsurance, BNSF, Apple shares, and BHEnergy.
- Berkshire has outperformed the S&P 500 20% to 10% annualized over 55 years, trailed over the past ten years, led over the previous decade and leads this year.
- Berkshire is hard to analyze because its businesses require different methods of analysis and are inter-connected in subtle ways; to summarize, it has solid growth at a reasonable price.
- With no dividend, buybacks are key and enable a manufactured dividend while generating growth in the percentage of ownership of assets and earnings.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of BRK.B, GOOG either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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