Run by the iconic Warren Buffett since 1965, Berkshire has grown from a textile manufacturing company to now include 80-plus businesses that run the gamut from insurance to railroads to utilities to ice cream. The Omaha, Neb.-based conglomerate consists of some $117.5 billion of a variety of stocks.
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The "Painful" Truth About Diversification
Portfolio diversification is one of the most widely advocated concepts in investing. Almost all financial planners recommend it.
But it's also one of the most misunderstood concepts.
Traditional diversification isn't a real-world way to create big wealth.
Warren Buffett certainly understands this, as you'll see.
So does Lynn...
The Winning Investment System That Gave Us Warren Buffett and Peter Lynch
So what do Warren Buffett and Peter Lynch have in common?
Aside from being legendary investors, neither one of them has ever used technical analysis to dig up a market-beating stock pick.
In a world bereft of charts, trend lines, and candlesticks, both of these heavy weights have relied entirely on fundamental analysis to earn their famous fortunes.
In fact, their disdain for technical analysis is so complete that Buffett once remarked, "I realized technical analysis didn't work when I turned the charts upside down and didn't get a different answer."
Meanwhile, Lynch once observed, "Charts are great for predicting the past."
Instead of focusing on market momentum, they simply concentrated on finding long-term value. It's called fundamental analysis.
And over time, that singular "system" made both men very wealthy.
How to Invest in Tech in 2013
If you want to know how to invest in tech in 2013, there's a major shift you should understand.
For much of the past three decades, technology companies have been huge sources of share-price growth. Some of the world's biggest tech companies have let growth stock investors latch on to their innovation potential and watch the share prices soar above other sectors.
These tech stocks have been a great growth story for decades, and their industry dominance has led to huge profits and cash piles.
But, the growth leaders have changed.
Three Stocks to Buy to Beat Warren Buffett's Gains
While many look to Warren Buffett's holdings to find the best stocks to buy, it turns out his holdings' rivals could be the better picks.
Buffett is known not only for value investing, but also buying shares only of companies that operate in prosaic, easy-to-understand businesses. That's why the holdings of Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) are spectacular.
But in this look at how to find more stocks to buy that deliver - and even beat - the gains of Buffett's most popular holdings, some of the best bets could be companies that share a market with Berkshire's big winners.
Take a look.
What Was the Real Motive Behind Warren Buffett's Goldman Deal?
Legendary investor Warren Buffett is set to become one Goldman Sachs Group Inc.'s (NYSE: GS) largest investors without shelling out one penny.
Impressive as that is, what's even more striking is how the guru investor brokered the Goldman deal to his distinct advantage.
The savvy CEO of Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) amended terms of warrants--a type of security that gives the holder the right to purchase securities from an issuer at a certain price within a certain time frame-issued to Berkshire during the 2008 financial meltdown.
At the time, Buffett's investment in Goldman was gutsy. It was viewed as a vote of confidence in the bank as the country faced economic crisis.
The warrants originally gave Berkshire the right to buy $5 billion worth of Goldman common shares at $115 each any time before Oct. 1. Thanks to the new $1.5 billion deal inked Tuesday, Buffett's company will receive 9.2 million shares.
According to data from Bloomberg News, that makes Berkshire the ninth-largest shareholder in Goldman.
The Oracle of Omaha said in a press release, "We intend to hold a significant investment in Goldman Sachs, a firm that I did my first transaction with more than 50 years ago. I have been privileged to have known and admired Goldman's executive leadership team since my first meeting with Sidney Weinberg in 1940."
Berkshire's windfall from the investment surpasses $3 billion, making it one of Buffett's most profitable wagers in recent history.
Goldman also benefits. The investment bank avoids a flood of sell-side shares that would have been dilutive. It also gets to include the revered name of Warren Buffett to its shareholder roster.
"We are pleased that Berkshire Hathaway intends to remain a long-term investor in Goldman Sachs," Goldman's CEO Lloyd Blankfein said in a statement.
How to Invest Like Warren Buffett
If you want to know how to invest like the best, a good place to start is with Warren Buffett.
He now ranks fourth on Forbes' Richest Billionaires list, with a new worth of $53.5 billion.
Part of the reason for his success: He was never swept up in the euphoria of Wall Street crowds.
Behind the small-town-boy-turned-mogul story is a keen mathematical mind that has been honed into a highly successful stock-picking machine. Buffett began under the mentorship of the late Benjamin Graham, the father of value investing. Buffett perfected his skill through countless hours of studying annual reports of virtually every American publicly traded company over the last five decades.
Now the Oracle of Omaha's Berkshire Hathaway empire consists of some of the most recognized U.S. brands.
Buffett's "Big Four" investments - American Express Co. (NYSE: AXP), The Coca-Cola Co. (NYSE: KO), International Business Machines Corp. (NYSE: IBM) and Wells Fargo & Co. (NYSE: WFC) - represent the kind of businesses Buffett trusts his money to.
"The four companies possess marvelous businesses and are run by managers who are both talented and shareholder-oriented," Buffett wrote in his 2012 Berkshire Hathaway shareholder letter. "We much prefer owning a non-controlling but substantial portion of a wonderful business to owning 100% of a so-so business."
By taking a closer look at Buffett's career, and his favorite investments, we pinpointed three key factors to Buffett's investment formula that separate him from the common investor.
These factors, employed at key moments in Buffett's decision-making process, reveal a sophisticated formula for stock selection, as well as exploiting opportunities when other investors overreact.
What Warren Buffett's Shareholder Letter Tells Us
Warren Buffett's shareholder letter to Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) investors was full of the Oracle of Omaha's market wisdom and one-liners, plus some hints about what Berkshire will pursue in 2013.
Here's a look at what Buffett discussed in the March 1 letter.
Does the Heinz Deal Mean Warren Buffett Has Become a Doomsday Prepper?
At first sight, Warren Buffett's deal with the Brazilian-led private equity firm 3G Capital to purchase H.J. Heinz Company (NYSE:HNZ) looks strange.
At $28 billion the famed ketchup maker is valued at a rich 23 times earnings, and Buffett won't even control the management, which is to be left to 3G. Given Warren's long and storied history, something doesn't make sense.
But maybe he's become a doomsday prepper.
In the age of Ben Bernanke, canned baked beans and the like seem to make as the ideal investment. Or maybe Buffett feels that the dollar is about to be wiped out by hyperinflation.
Of course, in those circumstances, you would normally buy gold, but maybe Buffett believes that the crash will be so severe that the economy as a whole will break down.
In that case, you'd want guns and ammunition. Buffett's holding company Berkshire Hathaway (NYSE:BRK-A and BRK-B) does not own a gun manufacturer, but a subsidiary manufactures shoes under license from Browning Arms Company, so no doubt a deal could be done.
However, an even more strategic asset in such an event would be imperishable canned food, and you can certainly imagine a gigantic stockpile of Heinz 57 varieties being accumulated in warehouses around Omaha, maybe accompanied by a lake of ketchup, allowing Buffett to corner the market in baked beans and condiments.