Luckily for Berkshire shareholders, Buffett hasn’t had to test that principle, thanks largely to its massive, stable insurance segment, which includes industry behemoths Geico and General Re. As I noted recently, however, Berkshire also made nearly $9.7 billion last year from its stakes in chemical maker Lubrizol, industrial stalwart Marmon, metalworking specialist Iscar, MidAmerican Energy, and Burlington Northern.
And don’t forget that Berkshire just last month acquired a 50% stake in ketchup king H.J. Heinz Company (NYSE:HNZ), after which Buffett publicly stated he fully intends to continue his buying spree with Berkshire’s ever-growing cash pile.
What’s more, Berkshire also owns literally dozens of other various diversified companies, including Fruit of the Loom, Dairy Queen, NetJets, Pampered Chef, See’s Candies, Shaw Industries, McLane, Clayton Homes, and Ben Bridge Jeweler, to name just a few.
With a list like that, the word “diversified” just doesn’t seem to do Berkshire justice.
3. Like a mutual fund, only better
Finally, and as you might be aware, Buffett also knows a thing or two about investing. So if you’re still not convinced by Berkshire’s incredible management and incredibly diverse group of solid underlying businesses, maybe its equity portfolio will push you over onto the bull’s side of the fence.
You see, thanks to Berkshire’s massive balance sheet, Buffett is afforded the ability to invest both its shareholder equity and the float from its insurance operations — the latter of which provided more than $73 billion in free money to invest last year.
In case you’re worrying what will happen when Buffett is no longer around to manage that money — he will be 83 this August, after all — rest assured he’s covered those bases, too. For the past few years, Buffett has been steadily increasing the responsibility of two like-minded former hedge-fund managers in 42-year-old Combs and 52-year-old Ted Weschler, most recently noting they have both “proved to be smart, models of integrity, helpful to Berkshire in many ways beyond portfolio management, and a perfect cultural fit.”
As a result, Combs and Weschler now manage a total of nearly $10 billion of Berkshire’s portfolio and should be well prepared to take over completely when they’re called to do so.
The article 3 Reasons to Buy Berkshire Hathaway originally appeared on Fool.com is written by Steve Symington.
Fool contributor Steve Symington has no position in any stocks mentioned. The Motley Fool recommends Berkshire Hathaway, Coca-Cola, and H.J. Heinz and owns shares of Berkshire Hathaway.
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