Berkshire Hathaway (BRK.A -0.23%) (BRK.B -0.45%) has been a force to be reckoned with in the financial world since Warren Buffett took the helm in 1965. Buffett has used his skill and savvy to guide the company to incredible success, amassing a fortune for himself and his investors. But what is it that makes Buffett's methods work?
The answer lies in Buffett's ability to distinguish between a depressed stock price and a business in trouble. By analyzing the underlying fundamentals of a company, he is able to identify mispriced stock and recognize when a business is in trouble. This knowledge allows him to make quick, informed decisions that are often very profitable. Not only does this method of stock selection benefit investors, it also helps Buffett to build a portfolio of businesses that are well-managed and have solid fundamentals.
In addition, Buffett is adept at using Berkshire Hathaway's considerable resources to make investments in businesses that he believes will be successful in the long run. These investments often pay off handsomely, as evidenced by Berkshire Hathaway's track record of outperforming the market over time.
Buffett's success is also due to his ability to take a long-term view of the markets. By looking beyond the day-to-day fluctuations of the stock market, he is able to identify trends and make investments that will pay off over the long term. This long-term approach has allowed Buffett to make investments that have paid off handsomely over the years, and it has also enabled Berkshire Hathaway to outperform the market over time.
Buffett's success has also been helped by his willingness to invest in companies that are not in the public spotlight. By taking a long-term, patient approach to invest, Buffett has been able to identify and invest in companies that may not be popular or well-known, but which have the potential to be successful. These investments have often paid off handsomely, as evidenced by Berkshire Hathaway's incredible track record.
Finally, Buffett's success at Berkshire Hathaway has been aided by his willingness to use leverage to his advantage. By using leverage, Buffett has been able to increase his returns and maximize his profits. This has allowed him to make even more money, and it has also allowed Berkshire Hathaway to outperform the market.
