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Berkshire Hathaway is one of the most famous companies in existence. Their CEO, Warren Buffett, is one of the most famous investors of all time and is considered to be the greatest investor of all time by many. Berkshire Hathaway has a very impressive market cap of 600 billion dollars and is the owner of some very impressive businesses.
It is very difficult to find someone who doesn't do business with at least one of Berkshire's businesses. If one wears Fruit of the Loom, gets ice-cream at Dairy Queen, powers their things with Duracell, insures with Geico, etc., they are doing business with Berkshire Hathaway. With this in mind, one can see why Berkshire is such a big company, but does the stock still represent a good buying opportunity?
If one looks at Berkshire Hathaway's performance over the last 5 years, one can see that it increased in value by around 76%. That's not bad, but it is less than the around 107% gain that the S&P received over the same amount of time. This means that investing in Berkshire 5 years ago would not have beaten the market. Also, Berkshire's CEO is now 90 years old. This means that Buffett is likely to leave the company soon which could hurt Berkshire. Warren Buffett has named his successor, and he seems to believe that the company will be left in very capable hands, but this is something that investors should consider.
Berkshire does, however, have a lot going for it as well. They have a p/e ratio of 7 which means that it is trading at a much lower price to earnings ratio than most companies. A low p/e ratio on a company that still has a lot of growth potential is something that should make investors happy. Also, if one looks at the public investments that Berkshire has and believes that those businesses will grow, then it would not make much sense to not want to hold Berkshire's stock. Berkshire's private and public companies do show a lot of growth possibilities, and if one thinks they will grow, then it would make sense to hold Berkshire.
Berkshire Hathaway is a pretty safe investment relative to other opportunities, and it is likely to be a good stock for someone that is trying to preserve their assets. It is likely to be a low risk, low reward holding. It likely does have a lot of growth left, but it is unclear if it will out perform the market over a long period of time.
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