The celebration of Warren Buffett’s 50th year as the CEO of Berkshire Hathaway Inc. is this year. With only 2 weeks left to Berkshire Hathaway’s AGM, we take a look at the top 5 little known fact about the oracle of Omaha in his 50 years as the head of Berkshire Hathaway.
- Many thought that Berkshire Hathaway, the textile mill, was the main business that provided the starting cash for all its future growth. The fact is the company really only took off after Buffett acquired National Indemnity and National Fire & Marine for US$8.6 million from his friend Jack Ringwalt back in 1967. The insurance company provided the float and new cash flow for Berkshire to grow exponentially after that.
- Buffett unconsciously used Berkshire Hathaway as the purchaser of National Indemnity instead of his BPL Partnership. This decision made him only a 61% owner of National Indemnity through his investment in Berkshire Hathaway. Had he bought National Indemnity directly for his BPL Partnerships, his partners and him would have create an additional US$100 billion in additional wealth by now.
- Buffett and Munger was once charged by SEC for manipulating the stock price of Wesco Financial Corporation in 1976. However, the incident was most likely due to the complicated cross holdings between Buffett and Munger rather than a deliberate act by them to manipulate the Wesco stock.
- Charlie Munger’s partnership performance was actually better than Buffett’s for the first 10 years of their career from 1962 to 1971. Munger suffered two consecutive years of bad return in 1973 and 1974. These two years wiped off more than half of his portfolio.
- Berkshire Hathaway current employees count at about 340,500 people but its headquarter is still run by just 25. The secret to Buffett’s management style is decentralized operation but centralized capital allocation.
To all you Berkshire Hathaway’s shareholders, congratulations, here’s to another great year ahead.
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The information provided is for general information purposes only and is not intended to be any investment or financial advice. All views and opinions articulated in the article were expressed in Stanley Lim’s personal capacity and do not in any way represent those of his employer and other related entities. Stanley Lim owns Berkshire Hathaway B Class Shares.