Berkshire Hathaway, Inc. is a holding company, which owning subsidiaries engages in a number of diverse business activities. It engages in insurance businesses conducted on both a primary basis and a reinsurance basis. Berkshire's operating businesses are managed on an unusually decentralized basis. It provides business functions, such as sales, marketing, purchasing, legal or human resources and there is minimal involvement by Berkshire's corporate headquarters in the day-to-day business activities of the operating businesses. Its insurance and reinsurance business activities are conducted through domestic and foreign-based insurance entities. The company's insurance businesses provide insurance and reinsurance of property and casualty risks world-wide and also reinsure life, accident and health risks world-wide. Berkshire's four underwriting groups includes GEICO, General Re, Berkshire Hathaway Reinsurance Group and Berkshire Hathaway Primary Group. The company also owns the railroad business of Burlington Northern Santa Fe Corp. and a majority stake in MidAmerican Energy Holdings Co. The company was founded by Oliver Chace in 1839 and is headquartered in Omaha, NE.
Warren Edward Buffett is an American business magnate, investor, and philanthropist. He is widely considered the most successful investor of the 20th century. He is the primary shareholder, chairman and CEO of Berkshire Hathaway.
Born: August 30, 1930 (age 81), Omaha
Net worth: US$ 44 billion (2012)
Spouse: Astrid Menks (m. 2006), Susan Buffett (m. 1952–2004)
Children: Howard Graham Buffett, Peter Buffett, Susan Alice Buffett
Education: Columbia Business School (1950–1951), University of Nebraska–Lincoln (1950–1950), Wharton School of the University of Pennsylvania (1947–1949), University of Pennsylvania
Appears in: Buffett & Gates Go Back to School
Charles Thomas Munger Jr., Vice-Chairman, Chairman of Wesco Financial Corp. and Chief Exec.
Like Buffett, Munger is a native of Omaha, Nebraska. After studies in mathematics at the University of Michigan, and service in the U.S. Army Air Corps as a meteorologist, trained at Caltech, he entered Harvard Law School, where he was a member of the Harvard Legal Aid Bureau, without an undergraduate degree. Graduating in 1948 with a Juris Doctor magna cum laude, he founded and worked as a real estate attorney at Munger, Tolles & Olson LLP until 1965. He then gave up the practice of law to concentrate on managing investments. He partnered with Otis Booth in real estate development. He partnered with Jack Wheeler to form Wheeler, Munger, and Company, an investment firm with a seat on the Pacific Coast Stock Exchange. He wound up Wheeler, Munger in 1976 after losses of 31% in 1973 and 1974.
Although Munger is better known for his association with Warren Buffett, he ran an investment partnership of his own from 1962 to 1975. According to Buffett's essay, "The Superinvestors of Graham-and-Doddsville," published in 1984, Munger's investment partnership generated compound annual returns of 19.8% during the 1962–75 period compared to a 5.0% annual appreciation rate for the Dow.
Munger was previously also the chairman of Wesco Financial Corporation, now a wholly owned subsidiary of Berkshire Hathaway. It began as a savings and loan association, but eventually grew to control Precision Steel Corp., CORT Furniture Leasing, Kansas Bankers Surety Company, and other ventures. Wesco Financial also held a concentrated equity portfolio of over $1.5 billion dollars in companies such as Coca-Cola, Wells Fargo, Procter & Gamble, Kraft Foods, US Bancorp, and Goldman Sachs. Munger believes that holding a concentrated number of stocks, that he knows extremely well, will in the long term produce superior returns. Wesco is based in Pasadena, California, Munger's adopted hometown. Pasadena was also the site of the company's annual shareholders' meeting, which were typically held on the Wednesday or Thursday after the more famous Berkshire Hathaway annual meeting. Munger's meetings were nearly as legendary in the investment community as those he co-hosts with Buffett in Omaha. Such meetings were often perfunctory, but Munger interacted with the other Wesco shareholders at considerable length, sometimes speculating about what his hero Benjamin Franklin would do in a given situation. Meeting notes are taken and posted on the internet.
Buffett has often publicly stated that he regards Munger as his partner. Indeed, Munger owns enough Berkshire Hathaway stock to be a bona fide billionaire in his own right. However, Munger is hardly a carbon copy of Buffett: Munger is known to be a Republican, whereas Buffett has generally supported Democrats. Buffett devotes his time almost exclusively to his business, while Munger, who does not involve himself in the day-to-day operations of Berkshire, is a generalist for whom investment is only one of a broad range of interests.
Marc D. Hamburg, Chief Financial Officer and Sr. VP