Berkshire Hathaway’s investments thrived a great deal by sticking to its ideals and foundations laid by the very own Oracle of Omaha, Warren Buffet. The conglomerate has invested in companies like Coca-Cola, Bank of America, Apple, American Express, and more. But how do they scan potential companies before investing in them, a stockpile of money? Is it the impressive numbers in financial statements? Or futuristic business models? Or something entirely different? Let’s find out Berkshire Hathaway’s modus operandi when it comes to funding businesses, and what it is like for a company to be a Berkshire Investee.
Warren Buffet’s investments strategy
Warren Buffet has an investing principle: Don’t invest in stocks, invest in businesses. The same principle of the marquee investor is reflected in Berkshire’s way of picking companies to capitalize on. No wonder, the price action of the company’s stock usually does not impact the investing decisions of Hathaway. The patience endured by them reaps the exponential growth of wealth that made Berkshire, one of the largest holding conglomerates in the world.
Did you know, Paytm is the only Indian Berkshire Hathaway investment
Berkshire Hathaway’s investment pool has something in common: Stellar management, a loyal team, and a futuristic vision. While they eye for a compounding cash flow and good results, they also look out for the company’s managerial quality. In fact, Paytm’s CEO Mr. Vijay Shekhar Sharma pitched the stability of his team to Todd Combs, the investment manager at Berkshire Hathaway. He narrated how the Paytm team has remained consistent since inception and highlighted their preference for trustworthy and conscientious people over domain experts. The ardent trust between Berkshire group, its operating companies, and its investors is what the conglomerate expects all along.
The genius of Berkshire Hathaway’s investments lies not in the rocket science of stock picking, but in its acknowledgment and trust in the businesses in which it invests. In the Financial Times article of 2016, British Economist John Kay wrote: “The Buffett model is widely worshipped but little copied.” Quite the ponder-worthy words!
