Berkshire Hathaway began as a textile business. Berkshire Fine Spinning Associates, whose roots ran back to Oliver Chace's Valley Falls Company of 1839, merged with Hathaway Manufacturing of New Bedford in 1955 and took the name the company still uses. Buffett later wrote that the combined business had fourteen plants and about 10,000 employees and was the giant of New England textiles, and that it then lost money for seven straight years while its net worth fell 37%. Buffett Partnership bought its first shares in December 1962 because the company kept closing plants and buying back stock. In May 1964 Berkshire president Seabury Stanton agreed to pay $11.50 a share for the partnership's stake, then mailed a tender offer at $11.375. Buffett refused to sell, bought control in 1965, and later called the decision monumentally stupid.
The National Indemnity pivot and the economics of float
The decisive move came early in 1967, when Berkshire paid $8.6 million for National Indemnity Company and a small sister insurer, using cash the mills still generated. Insurance gave Berkshire float: premiums are collected before claims are paid, so an insurer holds money it does not own, sometimes for years. If underwriting breaks even, that money is free to invest; if underwriting is profitable, it costs less than nothing. Float grew from $88 billion at the end of 2015 to $176 billion at the end of 2025, and Berkshire earned a pre-tax underwriting profit in each of the three years to 2025. The textile operation, meanwhile, never worked. Buffett decided in July 1985 to close it and finished the job by year end.
GEICO, See's and what Munger changed
Two purchases set the template. In 1972 Blue Chip Stamps, which Buffett and Charlie Munger controlled and later merged into Berkshire, bought See's Candies for $25 million. See's had $30 million of sales, under $5 million of pre-tax earnings and only $8 million of capital in the business, which meant a pre-tax return near 60% and a lesson about brand pricing power; by 2007 it had produced $1.35 billion of pre-tax earnings. In January 1996 Berkshire bought the remaining 49% of GEICO, which it had half-owned, and took full control of a direct-selling auto insurer that was then seventh largest in the United States with about 3.7 million cars insured. GEICO is now third with about 11.6% of written premiums and earned $6.824 billion of pre-tax underwriting profit in 2025.
The decentralized conglomerate: BNSF and energy
Berkshire's head office is deliberately thin. Buffett wrote in 2014 that it had never had a committee, never asked subsidiaries to submit budgets, and had no legal, human resources, public relations, investor relations, strategy or acquisitions departments. The operating companies are large: BNSF runs over 32,500 route miles of track in 28 states and three Canadian provinces and produced $23.330 billion of freight revenue in 2025; Berkshire Hathaway Energy's four regulated US utilities serve about 5.4 million retail customers and its pipelines operate about 20,900 miles of pipe. Berkshire agreed to buy BNSF in November 2009, paying $100 a share for the 77.4% it did not own in a transaction worth about $44 billion including $10 billion of railroad debt. Buffett described his $34 billion investment as an all-in wager on the economic future of the United States.
The portfolio: Apple, Japan and concentration
Berkshire's equity portfolio was worth $297.8 billion at the end of 2025, with American Express, Apple, Bank of America, Coca-Cola and Chevron making up 65% of it. Apple, once the dominant position, was down to 1.6% of the company and $61.962 billion of market value after years of selling. Berkshire's roughly 10% stakes in Mitsubishi, ITOCHU, Mitsui, Marubeni and Sumitomo cost $15.4 billion and were worth $35.4 billion, funded largely by yen borrowings at an average cost of 1.2%. Concentration cuts both ways: 2025 net earnings of $66.968 billion included $30.737 billion of after-tax investment gains and $8.255 billion of impairments on Kraft Heinz and Occidental.
The succession, settled
Greg Abel became President and Chief Executive Officer on January 1, 2026, eight years after he and Ajit Jain were made vice chairmen and following the board's decision announced in May 2025. His first act of scale closed the next day: the $9.7 billion purchase of Occidental's chemicals business, OxyChem. On September 18, 2026 Warren Buffett stepped down as chairman, was named Chairman Emeritus and stayed on the board, and his son Howard G. Buffett became chairman. Abel inherited a company worth about $1.07 trillion with more than $370 billion of cash and Treasuries, and used his first letter to say what the money is for: own productive businesses rather than Treasuries, buy back stock only below intrinsic value, and keep enough liquidity to act when others cannot.
