Business Case Studies, Finance, Accounting and Control Case Study, Berkshire Hathaway Inc,Warren Buffet's Investment Philosophy

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Finance, Accounting and Control Case Study

Case Title:

Berkshire Hathaway Inc: Warren Buffet's Investment Philosophy

Publication Year : 2006

Authors: Bhavika S, Krishna Chaitanya V

Industry: Banking, Insurance and Financial Services


Case Code: FAC0029

Teaching Note: Not Available

Structured Assignment: Not Available

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Warren Buffet, the world's most successful investor and the second richest man after Bill Gates, was born on August 30th 1930 at Omaha, Nebraska, USA. Buffet, popularly known as the 'Oracle of Omaha' had made his first investment in shares when he was only eleven years old. In 1962, he began purchasing the shares of Berkshire Hathaway, a textile manufacturing firm at New Bedford. By 1965, he acquired Berkshire by purchasing the majority of its shares and then declared himself as the company's Director. He started investing and acquiring other companies through Berkshire, and soon transformed Berkshire into an investment-making firm. He employed the investment strategy of identifying undervalued companies, those having high-growth potential and a good management, which could produce high returns in the long run. He was a value investor and believed that the short-term fluctuations of the stock market would not affect his investment decisions. His investment approach helped Berkshire to earn substantial stakes in Coca-Cola Co., Wells Fargo Co., and American Express. Most of the Berkshire investments were made in the insurance and retailing sectors.

Pedagogical Objectives:

    To discuss the investment philosophies of Warren Buffet and debate on his business philosophies that led Berkshire to outpace the Dow Jones Industrial Average for more than 40 years.

Keywords : Entrepreneurship Case Study, Warren Buffet, Berkshire Hathaway Inc, Benjamin Graham, Investment philosophy, Wall Street, Buffet Associates Ltd, Buffet Partnerships, Insurance business, GEICO (General Employees Insurance Company), Competition, Shares, Stock market, Investment principles

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