Thorough selection of investment instruments
Berkshire Hathaway is well-protected from all possible headwinds. First, the company has successfully resolved the issue of agency costs. Secondly, putting funds in Berkshire is a perfect long-term investment. This almost eliminates the risk of corruption in the firm. At the same time, Berkshire stock makes up almost the entire fortune of Buffett, which is estimated at $110 billion. Investors trust his opinion on long-term profits. Berkshire Hathaway selects stocks to invest in with utmost care. Buffett’s portfolio includes such popular brands as Geico, Apple, and Coca-Cola. The legendary investor also has multi-billion dollar stakes in Bank of America and American Express. Old companies in the market usually raise prices whenever production costs increase without harming themselves. Notably, their profit soars amid interest rate hikes.
Extensive business opportunities
Subsidiaries of Berkshire Hathaway, like MidAmerican Energy, can reinvest, which allows the corporation to place tens of billions of dollars within the company and earn a solid return. In addition, Berkshire Hathaway's key advantage is the ability to access internal funding from its insurance businesses or the amount of insurance premiums collected before claims are paid. Thanks to its structure, Berkshire can move cash between its subsidiaries without paying corporate taxes.
Taking advantage of US housing boom
The company uses the US housing boom to its advantage. Some of its subsidiaries, including Benjamin Moore and Acme Brick, produce building materials. Owing to this business, Berkshire benefits greatly from the US housing shortage. As a monopolist, it can raise prices because merchants choose trusted brands and are not willing to shift to cheaper substitutes.
Buffett’s freedom of expression
According to analysts, Buffett's current investments in traditional and innovative companies almost always bring him a profit. At the same time, in the event of unexpected jitters, the businessman’s corporation will unlikely collapse. After all, the legendary investor is believed to have secured a stable niche in global investment, so he can bask in the glory of his success. However, in order to achieve it, the entrepreneur had to work hard and sometimes suffer substantial financial losses.
Open-mindedness to new technologies
Warren Buffett used to invest in traditional companies. However, the Oracle of Omaha has changed his views and Berkshire Hathaway is now ready to invest in innovative technologies. The legendary investor acknowledges the importance of progress and the impact of the digital industry on Berkshire's operations and the global stock market.
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