BRK-B · Owner’s memo

Berkshire Hathaway

Financials · Omaha, NE · est. 1839

The original longhold: insurance float funding a collection of cash-generative operating companies and equities.

WideForeverFullClassicBerkshire overlap

Longhold

Earnings

Moat

Hold

Ten-year thesis

You do not buy Berkshire for a moat in one product. You buy the capital-allocation culture, the insurance float, the wholly-owned cash engines (BNSF, Berkshire Energy, manufacturing, retail), and a public equity book that already owns some of the same names in this universe. A ten-year hold is a bet that the culture survives its founders in good enough shape that owner earnings keep compounding in the low double digits. It is the benchmark, not the exciting idea.

The moat

Insurance float plus a reputation that lets Berkshire buy businesses and securities on terms others do not get. Diversified cash generation. Culture as an intangible asset — now the succession question.

Switching costs60

Pain, risk, or retraining required to leave.

Network effects40

The product gets better as more people use it.

Intangibles & IP88

Patents, data, licenses, process knowledge, regulation.

Scale advantage90

Fixed costs spread over a volume rivals cannot match.

Cost advantage70

Structural ability to be the low-cost producer.

Brand92

Pricing power from trust, habit, or identity.

Tech overlay

Berkshire itself was late to tech and then made Apple its largest holding. The lesson is not 'avoid tech.' It is 'wait until you understand it, then size it.' This platform is the wait-until-you-understand-it tool.

What can break it

Succession and culture drift
Opportunity cost of a fortress balance sheet in a high-return decade
Energy and rail regulatory pressure

Earnings path

USD billions, illustrative 2016–2025 series

Owner metrics

P/E

22.0×

P/FCF

18.0×

ROIC

ROE

10%

FCF conversion

70%

Debt / equity

0.25

Gross margin

28%

Op. margin

18%

10y rev CAGR

10y EPS CAGR

12%

Owner earnings

$38.0B

Mkt cap

$1.05T

Owner earnings yield 3.6%. Yield is judged against quality, not against a single hurdle — a fortress can be fairly priced at a lower yield than a fragile name.

ConglomerateInsuranceCulture