“invest in REAL stuff. Financial companies don’t deal in REAL stuff.”
Some major BH subsidiaries are:
Central States Indemnity [Insurance]; Gateway Underwriters Agency [Insurance]; GEICO Auto Insurance [Insurance]; General Re [Insurance]; National Indemnity Company [Insurance]; UCFS (United Consumer Financial Services - a unit of the Berkshire Hathaway subsidiary “Scott Fetzger Companies”) [Insurance]; United States Liability Insurance Group [Insurance]; Wesco Financial Corporation (includes Wesco Financial Insurance Company [Insurance], Kansas Bankers Surety Company [Insurance], as well as the non-financial industry companies CORT Business Services and Precision Steel Warehouse Inc.).
http://www.berkshirehathaway.com/subs/sublinks.html
And, Berkshire Hathaway financial statements for 2009, listing assets by business categories, lists $223 billion for “Insurance and Other”, $29 billion for “Finance and Financial Products”, for a combined insurance and finance total of $252 billion out of an overall total of $297 billion.
On the revenue side, for 2009, “Insurance” represented $93 billion, and “Finance and Financial Products” $8 billion, out of a total of $112 billion. Again, combined they represent the largest share of Berkshire Hathaway’s earnings.
http://www.berkshirehathaway.com/2009ar/linksannual09.html
So much for your idea that Buffet concentrates his dollars on companies that produce “real” stuff.
He DOES own a large variety of companies BUT insurance (”pieces of paper” on which income is earned by speculating on risk) and financial services ARE the largest of his investments, by dollar value.
You do know that somehow he’s put the “real stuff” inside the overall insurance operation, right?
I should amend that:
The utilities and retail/manufacturing that he owns outright are called out, but th equity investments in all the stuff like BNSF, Coke, Washington Post, GE, Wrigley’s, Dow, etc... those are in the insurance operation, as well as the holdings of Treasury/Muni debt, corporate paper, cash, etc.