Yes, me too. And admittedly, there's a lot you can take away from this as an investor. However, as a shareholder of Berkshire Hathaway (WKN: A0YJQ2), I would like to draw your attention to a very important point today. In fact, Warren Buffett sort of defines his Big Four in the letter. Or, as he himself calls them, his jewels. Therefore, let us see below what you should know about it.
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Warren Buffett's Big Four!
As we can see by looking at the fifth page of this year's letter to investors, there is a headline here that addresses the family jewels in the title. As well as how Warren Buffett at Berkshire Hathaway is using these companies to create value for investors. As I said, I can only reiterate how important the letter can be overall for Foolish business-oriented investors.
If the short version is enough for you: Warren Buffett suggests here how his Big Four help him create value for investors. His Big Four are the most important divisions of Berkshire Hathaway. Namely, the insurance business, BNSF and Berkshire Hathaway Energy, and its own stake in Apple.
Regarding the insurance business, Warren Buffett elaborates that this segment of the business brings a huge mountain of cash into the conglomerate every year. That, in turn, gives the Oracle of Omaha the flexibility it needs to invest. Whereby it is the size of Berkshire Hathaway in this segment that plays a crucial role. Only this will allow the star investor to invest as he actually does.
Berkshire Hathaway Energy and BNSF sees Warren Buffett as jewels in infrastructure segment. In each case, he points to the strong market position, expanded market positions and solid cash flows that also carry these business models over time. After all, BNSF now owns the highest freight volume in the U.S. market. Berkshire Hathaway Energy, on the other hand, has developed into a unit that generates annual earnings of $3.4 billion. US dollar comes. After a value of 122 million. US dollars at the turn of the millennium.
Last but not least, of course, is Apple, which also has a formative character. Warren Buffett first points out that while this gem has sold off somewhat recently. However: the relative share has risen from 5.2% to 5.4%, partly due to share buybacks. Warren Buffett continues to hold on to this stake accordingly.
These four define Berkshire Hathaway!
In his letter to investors this year, Warren Buffett therefore explicitly addresses the business models that he believes are most important for operational success. We recognize: a major global insurer, a leading freight service provider in the U.S., a high-profit energy company and a growing stake in Apple stock.
There's no question about it: this looks to me like a return-generating foundation over the long term. Even if Warren Buffett's Big Four may no longer beat the market: Wealth growth is possible over the long term.
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Vincent owns shares of Berkshire Hathaway. The Motley Fool owns and recommends shares of Apple and Berkshire Hathaway (B shares) and recommends the following options: Short March 2021 $225 call on Berkshire Hathaway (B shares), Long January 2023 $200 call on Berkshire Hathaway (B shares) and Short January 2023 $200 put on Berkshire Hathaway (B shares).
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