Berkshire Hathaway Singapore Setup
Berkshire Hathaway Singapore exempt private company was setup back in 2013. The company has established a Singapore branch called Berkshire Hathaway Specialty Insurance company which plans to sell coverage in Singapore for commercial property, business liabilities, energy and construction projects, and marine and financial risks.
Berkshire Hathaway is certainly not a unfamiliar name to value investors around the world. For those who are new to value investing, they may not have heard of this giant US conglomerate, Berkshire Hathaway Inc. But many of us should at least heard of Warren Buffett, our legendary value investor master and the Oracle of Omaha. In fact, a case study was presented at Value Investing College Apex 2016 in Singapore by our fellow value investing gurus.
Warren Buffett owns Berkshire Hathaway Inc. This is an American multinational conglomerate holding company headquartered in Omaha, Nebraska state of USA. The company managed a group of textile milling plants at her earlier stage and it was Warren Buffett who became a controlling stake shareholder in the 1960s and turned this company from a money losing business to one of the world’s largest public listed companies.
It was an ingenious idea for Warren Buffett to use Berkshire Hathaway as a holding company to fully acquire reputable companies such as GEICO, an insurance company. Warren uses its assets and funds to acquire other value stock companies. Berkshire Hathaway also fully owns BNSF, Lubrizol, Dairy Queen, Fruit of the Loom, Helzberg Diamonds, FlightSafety International, and NetJets. It partially owns Kraft Heinz Company, Mars Incorporated and significant minority holdings in American Express, The Coca-Cola Company, Wells Fargo, IBM and Restaurant Brands International. Through years of business acquisitions, the holding company has become one of the largest multinational conglomerate diversifies in many different industries.
Berkshire Hathaway has two listed shares namely Share A (BRK.A) and Share B (BRK.B). BRK.A costs over USD210,000 per share while BRK.B costs over USD125 per share. If we compare over the last 49 years, Berkshire Hathaway has an averaged an annual growth in book value of 19.7% to its shareholders compared to 9.8% from the S&P 500 with dividends included for the same period. It holds large amounts of capital for opportunity funds and minimal debt.
The take on Berkshire Hathaway
We may probably not owning Berkshire Hathaway now as its share value is already over priced aside its extraordinary high stock price. With its strong moat of holding of companies with strong moat, the company should do well in the long run provided there is no drastic change of its stock portfolio. The probably risk in this company is People risk where both its Chairman and Vice chairman, Warren Buffett and Charlie Munger are already at their 80s and 90s. If they pass on, it might create market uncertainty for a short period. If you have the cash on hand and if this scenario happens, it may be the right time to consider investing this company when the stock entry price meets our value investing criteria.