Berkshire Hathaway (NYSE: BRK.B) is the holding company Warren Buffett built: GEICO and reinsurance generate low-cost float, that float funds wholly-owned businesses such as BNSF Railway and Berkshire Hathaway Energy, and on top sits a large listed equity portfolio led by Apple. It pays no dividend.
Insurers collect premiums before paying claims, and the money held in between is float. If underwriting roughly breaks even, that float costs nothing — free leverage that grows with the business. Berkshire has routed float into subsidiaries and listed stocks for decades, compounding without outside financing and without paying anything out.
Insurance and reinsurance supply the float. BNSF and Berkshire Hathaway Energy are regulated infrastructure with predictable cash flow. The Apple-led equity book makes reported net income swing with markets, so operating earnings is the better measure. A vast Treasury-bill position earns yield and is dry powder.
At this size only a handful of deals can move the needle, so returns converge toward the index. Post-Buffett succession is the main long-term discount factor. Concentration in one position amplifies swings, and catastrophe years hit reinsurance while the railroad tracks the economic cycle.
A large cash pile lets Berkshire supply capital on favourable terms during panics. Buybacks below intrinsic value are themselves high-return capital allocation. Grid and renewables capex can absorb very large sums at regulated returns.
Berkshire compounds without dividends — retained earnings are embedded in the share price, a useful contrast to DRIP compounders. Track operating earnings rather than net income, the size and cost of float, and buybacks relative to book value.
Note: Berkshire pays no dividend, so these figures are pure price return. Past performance is not a guarantee of future results. Data updates daily.