v3 Chapter 775： Buffetts astonishment (1/2)
Tiger Fund, Bridgewater Fund and Polaris Capital are all in action. Xia Yu is not doing nothing, but heading into the New York Stock Exchange, continuing to study stocks, hoping to discover one or even several future super gold stocks.
”Under the leadership of CEO Byrne, the cost of insurance claims in the first quarter fell by 5% year-on-year. It is expected to get out of the quagmire...”
On the New York Stock Exchange, Xia Yu sat in a chair, flipping through today's edition of The Wall Street Journal. In a corner of the secondary page, a piece of news caught his attention.
”The company? It turned out to be this company? Has it begun to get out of the quagmire now?”
Xia Yu's eyes condensed, and he looked down.
After reading it for a long time, he closed his eyes and pondered, thinking about everything about the company.
Then he opened his eyes and quickly got up and looked for all the news about the company, especially the shareholder information.
The New York Stock Exchange is the best place to collect information. The New York Stock Exchange itself saves the information of each listed company and makes it public.
So it didn't take long for Xia Yu to collect the company's information. Looking at the shareholder information on it, a light flashed in his eyes, and he said in his heart.
I saw that on the list of major shareholders, in the position of the second largest shareholder, there stood a company that was famous in the future, Berkshire Hathaway.
The shareholding ratio is 27.3%!
Soon after, he collected information from Berkshire Hathaway again, trying to make a more accurate judgment.
The next morning, he collected all the information from the two companies. He sat in his office, contemplating his eyebrows.
Needless to say, Berkshire Hathaway, Warren Buffett’s company, has a market value of more than US$500 billion in future generations, and is among the top five in the world. It is a proper financial empire.
But now, Berkshire Hathaway has not changed, just a company with a market value of 270 million US dollars.
Last year, Berkshire Hathaway’s operating profit was only $34 million.
But this profit is already the highest profit ever from Berkshire Hathaway.
It is precisely because of the explosive profit last year that the market value of Berkshire Hathaway has increased by 110% throughout the year.
In other words, at the beginning of last year, the market value of Berkshire Hathaway was more than $100 million.
However, even today's market value of 270 million US dollars is quite low. Thinking about the market value of more than 500 billion US dollars in later generations, the gap has reached nearly two thousand times!
More importantly, the shares of Berkshire Hathaway have not been split until later generations, and the potential value of each share is now super amazing.
Considering the future generation of Berkshire Hathaway’s stock price of more than 300,000 US dollars per share, Xia Yu could not help but feel a lot of emotion when compared to the current share price of several hundred US dollars.
Of course, Xia Yu, who has the memory of later generations, is very clear that the high market value of Berkshire Hathaway is due to Warren Buffett’s super-smart investment, and it is Berkshire Hathaway who invests in annexed companies. A key step in the transformation of the company.
The later Berkshire Hathaway was a giant in the insurance industry in the United States and the world, and the foundation of all this came from the company.
Speaking of this, I have to mention the company's brilliant history.
The full name of this company is the Government Employees Insurance Company. It was founded in the 1940s and mainly engaged in the auto insurance business for government employees. After Graham's brilliant management, the Government Employees Insurance Company developed rapidly and became a government employee insurance company in more than ten years. The fifth largest auto insurance company in the United States, with its market value exceeding one billion US dollars at one time!
Only in 1976, Graham had already left the company and ceased to serve as the chairman of the board, and died that year. The company's management made a series of errors in the assessment of insurance claims costs, which caused the company's claims to be costly. Increased, the company fell into a loss and almost went bankrupt.
At this time, Warren Buffett took action and began to intervene in buying the company's stock from the market.
Although Berkshire Hathaway is hunting the bottom, the dead camel is bigger than the horse. After all, the company was once the top auto insurance company in the United States. Even if the company is on the verge of bankruptcy due to a sudden management error, it cannot conceal its glory. Past and deep heritage.
In 1976, Berkshire Hathaway had a market value of less than 100 million U.S. dollars, but its investment capital was even less. Where can a company with a market value of several hundred million worth?