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Back of Napkin

Berkshire Hathaway Inc. BRK-B

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The bet you're really making is that Berkshire Hathaway, the group of about sixty businesses Buffett built, a railroad, power utilities, GEICO car insurance, plus a mountain of stocks and a large cash reserve, keeps growing its worth faster than the market now that Greg Abel runs it. You're betting the insurers keep collecting more in premiums than they pay out in claims, and that the cash pile gets spent well. Right now it is going fine: the businesses earned more and revenue rose 10% last quarter, though the headline profit swings wildly because it now counts every move in the stock portfolio. You pay 1.5 times what the company is worth on paper, the most it has cost by that measure in twelve years.

Key data

Price$506.03
52-week range$464.01 to $537.74
P/E, trailing / FY2612.7x / 22.8x
Price / book1.5x

BRK-B · price with moving averages

Daily · 6MWeekly · 3Y
$315$375$436$496$556 Sep '23Apr '24Nov '24Jul '25Feb '26Sep '26 BID
EMAs82140

Source: market data.

The business

Berkshire is three things bolted together. First, businesses it owns outright: the BNSF railroad, Berkshire Hathaway Energy, GEICO and the reinsurance units, and a wall of manufacturing and retail names from See's Candies to Precision Castparts. Second, a stock portfolio worth more than $300 billion, led by Apple, American Express and Coca-Cola. Third, the largest cash reserve any company holds. The engine underneath is insurance float: money paid in by policyholders and held before claims come due, invested for Berkshire's own account at no cost as long as underwriting roughly breaks even. That float is the moat, cheap leverage no rival can copy. Sales and service from the operating businesses now make up 57 of every 100 dollars of revenue.

Inside the complete Back of Napkin

  1. 01The business
  2. 02The numbers
  3. 03Management
  4. 04How it fails or surprises you
  5. 05Closing thoughts
  6. 06Methodology

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