What Separates General Electric Company And Berkshire Hathaway?

GE and Berkshire both own a massive mix of businesses. But each has a distinctly unique formula for success.

Jul 12, 2014 at 12:00PM

Among the 10 largest companies (link opens a PDF) in the world, General Electric (NYSE:GE) and Berkshire Hathaway (NYSE:BRK-A)(NYSE:BRK-B) stand as the only two well-known conglomerates. Each owns businesses involved in an array of industries, employs at least 300,000 employees, and generates more than $140 billion in revenue annually.

In terms of operations, however, the similarities end there. Beneath the surface, these two corporate giants couldn't be more different than an upstate Yankee and a salt-of-the earth Midwesterner. And, in a sense, that's what they are.

Buffett At Omaha

Buffett, an Omaha native, at the annual meeting of shareholders in Omaha.

GE was founded in Schenectady, N.Y., in 1892, while Berkshire found a home in Omaha in the 1960s when Warren Buffett assumed control of the former textile operation. The former became an American manufacturing icon. The latter emerged as one of the best managed investing outfits of all time.

Today, investors regard each company as time-tested "blue chip" stocks, complete with built-in diversification due the assortment of businesses under a single umbrella. When in doubt, it seems you can't go wrong with GE or Berkshire over the long haul.

But before investing your hard-earned cash in either company, there are some important distinctions to keep in mind. A few questions I hear often from investors include the following:

  • What formula has worked for these companies while other conglomerates have failed?
  • Why does GE's dividend yield a hearty 3.2% while Buffett has shied away from dividends since 1966?
  • Why does Berkshire seem to scatter its bets far and wide while GE tends to align itself with a handful of industries?

In the following video, Motley Fool senior manufacturing specialist Isaac Pino dives into the characteristics that separate GE and Berkshire. When you look under the hood, these two companies run on a different type of fuel and with a different economic engine. It's no surprise then, that CEOs Jeff Immelt and Warren Buffett represent two different types of drivers at the wheel.

Watch the short clip below to better understand why one is a hands-on operator and the other is a backseat navigator. And find out why both styles work just fine.

Buffett is bullish on GE, but sees a "real threat" to his portfolio
At the recent Berkshire Hathaway annual meeting, Warren Buffett admitted an emerging technology is threatening his biggest cash-cow. While Buffett shakes in his billionaire-boots, only a few investors are embracing this new market which experts say will be worth over $2 trillion. Find out how you can cash in on this technology before the crowd catches on, by jumping onto one company that could get you the biggest piece of the action. Click here to access a FREE investor alert on the company we're calling the "brains behind" the technology.

Isaac Pino, CPA owns shares of General Electric Company. The Motley Fool owns shares of General Electric Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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