How do I buy Berkshire Hathaway stocks? All about investing in a Warren Buffett company

Berkshire Hathaway, the company managed by Warren Buffett, is now the eighth largest company in the world. It is a holding company that buys companies from various industries, guided by the profit criterion. The holding brings an average annual profit of 19%, while the average annual profit for the same period from the S&P 500 index is 9,7%. How to invest in Berkshire Hathaway? We provide the answer to this question in this guide.

Chart - Berkshire Hathaway Stock

Basic information about the company Berkshire Hathaway

Logo
Name	Berkshire Hathaway Inc
Headquarters	Omaha, Nebraska, USA
creation date	1839
Stock symbol	BRK.A, BRK.B
trade	Multi-branch holding
Capitalization	510 billion USD
Dividend	-
Web page	https://www.berkshirehathaway.com/

Company creation history

Berkshire Hathaway is a company with nearly 200 years of history. It was founded in 1839 by Oliver Chace as a textile factory. The company prospered in its first decades of operation and began to decline as demand for textiles declined after the First World War. At that time, the company was managed by Seabury Stanton, who made numerous investments and managed to restore the company's profitability for a while. At that time, the company had 15 factories, employed 12 people, and generated $ 000 million in revenue. However, as the years passed, the company was forced to close 120 factories and lay off a large part of its employees due to financial problems and a declining textile industry.

Warren Buffett enters the game

Warren Buffett began buying shares in Berkshire Hathaway in 1962 in order to earn a buyback of shares by the company following the closure of more textile mills. In 1964, Stanton offered Buffett to buy back his shares at $ 11,5 per share, to which Buffett agreed. However, Buffett eventually received a written proposal to buy back the shares at $ 11,375 a share. He refused to sell the shares at a lower price and instead decided to buy more shares, take control of the company and fire Stanton.

Following the Berkshire Hathaway acquisition, Buffett began investing and acquisitions in the insurance industry. The first companies he took over were National Indemnity Company and GEICOto this day remains a significant and highly profitable part of the holding. In 1985, Buffett closed the last textile factories.

The biggest mistake in Buffett's life?

Warren himself claims that the purchase of the title company was the biggest mistake of his life. By Buffett's estimate, it would have been 2010 times more profitable for him to invest directly in insurance companies, rather than doing so with the failing firm he took over. The Oracle of Omaha, as Buffeta is often called, in XNUMX, in an interview with CNBC stated that the purchase of Berkshire Hathaway deprived him of the opportunity to earn $ 200 billion over 45 years.

CEO of Berkshire Hathaway

Warren Buffett holds 31% of the voting shares of the company's board of directors and 18% of the market value of all shares.

Buffett gets a salary as CEO of $ 100 per year. It is one of the lowest CEO salaries among the largest companies in the United States.

The most expensive stocks on the stock exchange

The price of one share of the company is currently $ 320. They are the most expensive stocks in the history of the New York Stock Exchange. Stock prices exceeded $ 100 in 000. The high price of a single share is due, among other things, to the fact that the company has only paid dividends once since Buffett took over management of the company. As a result, the company's profits increase the book value of the shares. Another factor is also the fact that Berkshire Hathaway stocks have never been split into smaller stocks. This is dictated by the management's desire to attract long-term investors, not speculators.

Companies included in the holding

Berkshire Hathaway owns all companies such as Duracell, Dairy Queen, BNSF, Fruit of the Loom and GEICO. It also has significant shares in Kraft Heinz Company, American Express, Wells Fargo, The Coca-Cola Company, Bank of America and Apple Lossless Audio CODEC (ALAC),. Below is a list of industries and larger companies that are owned by Warren Buffett's holding.

Insurance

The insurance industry is the core business of Buffett Holding. The holding has over 70 insurance companies, both domestic and foreign. The largest insurance companies in Berkshire Hathaway's portfolio are: GEICO, Gen Re, NRG (Nederlandse Reassurantie Groep) and Berkshire Hathaway Assurance.

Energy

The company also has companies from the energy industry. The energy companies include a specially appointed holding company Berkshire Hathaway Energy (formerly known as MidAmerican Energy Holdings Co.). The largest of the energy companies is Northen Powergrid, a UK-based energy company.

Production

Berkshire Hathaway's portfolio includes many companies producing various consumer goods. Forest River Inc., acquired by Berkshire Hathaway in 2005, manufactures motorhomes and recreational vehicles. The company also has many companies that produce and sell clothing. The most popular ones are Fruit of the Loom, Russell Corporation, HH Brown Shoe Group, Acme Boots, Brooks Sports and Justin Brands.

architecture

Since 2000, Berkshire Hathaway has been investing in companies in the construction industry. The first step towards this industry was the acquisition of Acme Building Brands, a brick and concrete block maker. Other construction companies purchased by the holding include Benjamin Moore & Co., Johns Manville, MiTek Inc and Shaw Industries (the world's largest carpet manufacturer).

Services

Since 1996, the company has been investing in companies from the aviation services industry. FlightSafety International Inc (a company that offers training for aviation pilots) and NetJets are examples of companies in this industry.

Retail sales

The company's portfolio includes several furniture stores, such as Nebraska Furniture Mart, RC Willey Home Furnishings, Star Furniture Company and Jordan's Furniture Inc. The company also owns The Pampered Chef, which is the largest distributor of kitchen accessories in the United States. In 1995, the Helzberg Diamonds jewelry chain joined the portfolio of the holding, and in 2000 Berkshire Hathaway was bought by the Ben Bridge Jeweler chain of jewelry stores. The company also has chains of candy stores such as See's Candies and Dairy Queen.

Media

From the media industry, Berkshire Hathaway has had the Buffalo Evening News since 1977 and Business Wire since 2006. In 2011, Buffett bought Omaha World-Herald, and in 2012, 63 press titles from Media General.

How to Buy Berkshire Hathaway Stocks

To buy Berkshire Hathaway shares, you can set up an account at a brokerage house and buy shares directly on the US stock exchange through it. We can also choose ETFs and stock contracts (CFDs).

ETF

For people who want to diversify their investment more, they may be a good choice ETFs containing Berkshire Hathaway shares. Also of interest are ETFs, which try to emulate Buffett's strategy in selecting companies to invest.

[XLF] Financial Select Sector SPDR Fund

• • Annual fees: 0.13%
  • Issuer: State Street Global Advisors

The XLF fund includes companies from the financial sector listed in the S&P 500 index. Companies are weighted according to market capitalization. The fund is highly liquid and manages $ 17 billion in assets. The average daily spreads are 0.04%. The fund pays dividends of 1.89% per annum. Berkshire Hathaway is the largest company in the fund, accounting for 15.73% of the value. The next largest companies in this ETF are: JPMorgan Chase & Co., Bank of America, Wells Fargo & Company and Citigroup Inc.

[FNCL] Fidelity MSCI Financials Index ETF

• • Annual fees: 0.08%
  • Issuer: DMR LLC

The FNCL fund tracks the prices of companies from the financial sector across the US stock exchange. Unlike XLF, it does not only focus on S & P500 companies, so it gives a broader exposure to the industry. The fund boasts very low costs (0.08% per annum) and low spreads (0.06%). It manages $ 721 million and pays 2.87% of dividends annually. Berkshire Hathaway shares represent 9.25% of the fund. Other significant companies in the fund are, like in the above-mentioned XLF: JPMorgan Chase & Co., Bank of America, Wells Fargo & Company and Citigroup Inc.

[MOAT] VanEck Vectors Morningstar Wide Moat ETF

• • Annual fees: 0.48%
  • Issuer: vaneck

MOAT is a fund that does not have Berkshire Hathaway stocks in its portfolio, but tries to emulate Warren Buffett's strategy in selecting companies. It is a fund of 40 companies recognized by Morningstar as having the greatest competitive advantage and value. The fund is very popular and liquid - it manages assets worth 3.4 billion dollars. The average daily spread is only 0.02% and the annual dividend yield is 1.33%. The financial results of the fund are 9.75% of the profit for the previous year and 15.65% of the profit in 5 years.

Stocks and CFDs

Another possibility is to buy shares or CFDs on Berkshire Hathaway stock. This can be done e.g. Forex brokers. The advantages of this choice are direct and exclusive exposure to Berkshire Hathaway stocks and the possibility of investing with leverage in the case of CFD instruments (in Europe the leverage is 1:10).

Where to buy Berkshire Hathaway stocks

Below is a list of offers from selected brokers offering both ETFs, CFDs on ETFs, stocks and CFDs on Berkshire Hathaway shares.

For example on XTB Today, we can find over 3500 equity instruments and 400 ETFs, a Saxo Bank over 19 companies and 000 ETF funds.

Broker
End	Poland	Denmark
Number of exchanges on offer	16 exchanges	37 exchanges
Number of shares in the offer	approx. 3500 - shares circa 2000 - CFDs on shares	19 - shares 8 - CFDs on shares
The amount of ETF on offer	approx. 400 - ETF approx. 170 - CFD on ETF	3000 - ETF 675 - CFD on ETF
Commission	0% commission up to EUR 100 turnover / month	according to the price list
Min. Deposit	PLN 0 (recommended min. PLN 2000 or USD 500, EUR)	PLN 0 / EUR 0 / USD 0
Platform	xStation	SaxoTrader Pro Saxo Trader Go
	REVIEW	REVIEW
	CREATE AN ACCOUNT	CREATE AN ACCOUNT

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. From 72% to 89% of retail investor accounts record monetary losses as a result of trading CFDs. Think about whether you understand how CFDs work and whether you can afford the high risk of losing your money.

Traditional shares and CFDs

How to buy Berkshire Hathaway stocks, or which instrument is better - traditional stocks or CFDs? It all depends on our expectations, strategy and the time perspective of the planned investment.

If we believe that the share price will increase in the long term, then traditional stocks certainly seem to be a better choice - we do not use financial leverage here and therefore, if we are successful, we earn less, but at the same time risk less and bear no costs due to fees holding positions (swap points).

In the short term, CFDs allow you to maximize your profit thanks to leverage, even if there is low volatility in the market and the fees are generally higher. In addition, we have the option of betting on price drops.