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Berkshire Beyond BuffettThe Enduring Value of Values$
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Lawrence Cunningham

Print publication date: 2014

Print ISBN-13: 9780231170048

Published to Columbia Scholarship Online: November 2015

DOI: 10.7312/columbia/9780231170048.001.0001

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Investor Savvy

Investor Savvy

Chapter:
(p.119) 9 Investor Savvy
Source:
Berkshire Beyond Buffett
Author(s):

Lawrence A. Cunningham

Publisher:
Columbia University Press
DOI:10.7312/columbia/9780231170048.003.0009

This chapter discusses the importance of being investment savvy through the stories of the following Berkshire companies: McLane Co. Inc., a grocery wholesaler and distributor; MiTek, a manufacturer of machinery and components that builders need to turn architectural and engineering visions into reality; Lubrizol Corporation, and MidAmerican Energy Holdings Co. For Berkshire, the economic value of subsidiary acquisitions has compounded as their number and size have increased. They are vehicles for allocating large amounts of capital. In the years 2012 and 2013, for example, Berkshire’s subsidiaries made more than two dozen acquisitions with transaction values ranging from less than $2 million to more than $1 billion. Total deal value was $2.3 billion in 2012 and $3.1 billion in 2013. The opportunity to deploy large amounts of capital through a single subsidiary in individual transactions is vivid in the case of MidAmerican (now Berkshire Hathaway Energy).

Keywords:   investment, capital allocation, McLane Co, MiTek, Lubrizol Corporation, MidAmerican Energy Holdings Co, Berkshire Hathaway

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