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I thought Berkshire-Hathaway had been incredibly successful since Buffett had any share in it. What am missing?
by sopooneo 11y ago
I thought Berkshire-Hathaway had been incredibly successful since Buffett had any share in it. What am missing?
- hristov 11y agoYes it was incredibly successful because Buffet decided to turn it into his own holding company where he aggregated all his other purchases. But it was the other purchases that were successful, not the Berkshire business itself. The Berkshire business was a New England textile company that kept suffering as the textile industry was slowly but surely being moved out of the United States. Buffet has said many times that buying Berkshire was a mistake.
- gozur88 11y agoBuffett himself says it was his biggest mistake. He had some stock deal going with the Berkshire CEO and felt he was the victim of a bait-and-switch. He bought Berkshire so he could fire the guy. Two things: 1) People still act from emotion even when there's a hell of a lot of money at stake and 2) that kindly grandpa thing that Warren Buffett has going is an act.
- gregpilling 11y agoBuffett has called it a big mistake. Berkshire Hathaway was run with almost zero capital investment, and instead of modernizing factories they just shut them down. The success came once they were finally out of the suit lining business (what BH actually did) and into the holding company business. I think it probably influenced his thinking, and putting more emphasis on known brands. Berkshire Hathaway made suit linings, a commodity, and were not a known consumer brand. After BH, he made investments in See's Candies, Coca Cola, national or global name brands that have a hold on their market - a "moat" as he calls it.