Why Berkshire Hathaway Stock Is the Ideal Buy-and-Hold Investment
No investor is a bigger superstar than Berkshire Hathaway's (NYSE: BRK-A ) (NYSE: BRK-B ) Warren Buffett. But the beauty of Berkshire Hathaway stock is that even when Buffett is no longer able to run the company, the tenets that have guided his investment decisions will remain in place for his successors to follow for decades to come. Let's take a closer look at why Berkshire Hathaway stock offers good long-term prospects even after its recent run to record highs.
Berkshire's one-stop shop for investors
Even among conglomerates, you won't often find the breadth of industry coverage that you'll see among Berkshire's mix of businesses. Among the largest parts of Berkshire are its core insurance business, with its GEICO unit being the best-known insurance carrier in the mix; the railroad company Burlington Northern Santa Fe, which it purchased in early 2010; and its majority stake in MidAmerican Energy, which provides electric utility services as well as operating power-generation facilities using both conventional fuels and renewable generation methods like wind.
But along with those big parts, investors who own Berkshire Hathaway stock also get a wide range of other wholly owned businesses. Consumer brands like Helzberg Diamonds and See's Candies as well as business services companies like NetJets show the wide variety of businesses that Berkshire has felt comfortable buying over the years, demonstrating Buffett's commitment to finding profitable opportunities wherever he can.
What has made Berkshire's business unusual is that it hasn't hesitated to invest its insurance reserves in stocks rather than the bond investments that many of its insurance-company peers use. By building up a stable of blue-chip public companies with strong long-term stock performance, Berkshire has capitalized on the better returns that those stocks have provided compared to short-term bond investments.