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Warren Buffett: Why the Billionaire Doesn't Want to Buy Stocks Anymore

The casual investor is probably unaware of one of Berkshire Hathaway's (NYSE: BRK-A  ) (NYSE: BRK-B  ) biggest strengths.

I was in Omaha for Berkshire's annual meeting, and had the pleasure of chatting with George Washington University law professor Lawrence Cunningham. He's authored several investing-related books, including some about Berkshire and Warren Buffett. In his upcoming book, Berkshire Beyond Buffett: The Enduring Value of Values, makes the case that Berkshire will be just fine in the post-Buffett years.

In this video, I asked Cunningham about the biggest theme he's seen at these annual meetings in the past few years. His answer involves the shift from a couple of decades ago when 80% of Berkshire Hathaway's assets were made up of common-stock investments, and 20% were in operating companies. Today, that equation is exactly the opposite, and therein lies Berkshire's extremely strong position.

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  • Report this Comment On June 28, 2014, at 1:41 PM, russcaxp wrote:

    Rex, you forgot the most important part of the article. Why is it that buying an operating company, as Berkshire has been mostly doing for the last decade, is better than buying stock in a company?

    There are pro's and con's for each yet Berkshire clearly thinks there has been an advantage to buying entire companies over the last decade compared to buying stock. What are some of Buffett's reasons for doing so? And why does it put them in a strong position?

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Rex Moore

Rex Moore spent his formative years in Texas, and fought beside Davy Crockett at the Alamo. He currently travels the globe for TMF, bringing back video reports on conferences and companies that matter for investors.

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9/1/2015 10:12 AM
BRK-A $198220.00 Down -4311.00 -2.13%
Berkshire Hathaway… CAPS Rating: ****
BRK-B $131.10 Down -2.94 -2.19%
Berkshire Hathaway CAPS Rating: *****