The secret to Berkshire Hathaway's success and what Buffett's wallet looks like

Warren Buffett celebrated his 30rd birthday on August 93. Buffett is considered one of the best investors in history, he is a legendary figure in the world of finance. His investment firm, Berkshire Hathaway, has become synonymous with success and long-term investing strategies. What makes this mutual fund so special and what are the key features of its business model?

The Origins and Transformation of Berkshire Hathaway

Berkshire Hathaway initially it was textile company, founded in 1839. In 1962, Warren Buffett invested in the company's shares and then decided to take it over. Though the textile industry was ultimately unprofitable, Buffett used the company as a platform to transform Berkshire Hathaway into a powerful player in the financial markets.

Warren Buffett's investment philosophy

Buffett is known for applying the investment philosophy of long-term value investing. His approach focuses on buying shares in companies with solid foundationscapable of generating stable income in the long term. This approach differs from the short-term speculation that most investors prefer.

Diversification and its changes over time

Berkshire Hathaway is known for having a wide portfolio of different companies and industries. This approach is consistent with Buffett belief that diversification of investments can reduce risk and protect the portfolio during difficult market periods. The fund holds interests in companies as diverse as insurance companies, the energy sector, the consumer sector and technology. Here, however, in recent years, increase your involvement, which is further discussed in the description of the current portfolio.

Cash and the ability to wait

Buffett is a known proponent of hoarding cash during periods of uncertainty or a lack of attractive investments in the markets. This ability to wait patiently for investment opportunities allowed him to use periods of crisis to his advantage by buying stocks at lower prices.

Berkshire Hathaway as a Business Habitat

One of the defining aspects of Berkshire Hathaway is that Buffett sees the company as a hotbed for other businesses. This gives the companies it invests in the opportunity to benefit from a long-term perspective and financial support, while maintaining their autonomy.

The company's current investment portfolio

They have the largest share of Berkshire's portfolio Apple shareswhich account for 51% of assets. Their number owned by Buffett's vehicle is over 915 million, and their market value is over USD 177 billion. The average share purchase price is $39,59, which gives a rate of return of 365% (data as of the end of June 2023)

The second company with the largest share is Bank of America. It accounts for 8,51% of the portfolio. The number of shares held is over 1 billion, and their value is approximately USD 29 billion. The average purchase price was $25,78, which gives a return rate of 13%.

The third largest company in Buffett's portfolio is American Express. Here return rate is 125%, and the share in the portfolio is 7,59%.

Legendary Cola Cola, of which Warren Buffett owns 400 million shares, constitutes 6,92% of Berkshire's portfolio. The average purchase price of the stock is $40,28 and the rate of return is 50%.

Other companies have a smaller and smaller share and do not have such a significant impact on the fund's result.

Summation

Berkshire Hathaway and Warren Buffett's investment philosophy are a prime example of how a long-term approach to investing, a focus on fundamental value, and the ability to seize opportunities in the markets can lead to spectacular results. Buffett remains an icon and Berkshire Hathaway is one of the largest and most respected mutual funds in the world.

So it remains to wish 200 years!