2 Chapter2: Reporting Intercorporate Investments and Consolidation of Wholly Owned
Subsidiaries with No Differential
BERKSHIRE HATHAWAY’S
MANY INVESTMENTS
As of this writing (March 201 0), Warren
Buffett is the third richest man in the world,
worth a staggering $47 billion. He is also
the chairman, CEO, and primary
shareholder of Berkshire Hathaway Inc.
Over the past 44 years, Berkshire has
grown at an average rate of 20.3 percent
annually. Warren Buffett has achieved this
success through his unparalleled business
sense regarding investments and
acquisitions of other companies.
Berkshire Hathaway was originally a
textile manufacturing company. In 1 962,
Warren Buffett and his partners began
buying large blocks of Berkshire stock.
Within five years, Buffett began expanding
into the insurance industry, and in 1 985 the
last of Berkshire's textile operations was
shut down. In the late 1 970s Berkshire
began acquiring stock in GEICO insurance
and in January 1 996 bought GEICO
outright. While Berkshire has extensive
insurance holdings, it has not focused its
investment activities solely on insurance.
Since Buffett took the helm in the 1 960s,
Berkshire has made many acquisitions.
Look at the list of selected Berkshire
holdings as of the end of 2009 (on the next
page). Do you recognize any of these
companies?
Each item in Berkshire's portfolio has to
be accounted for individually. For example,