12H·

Berkshire's biggest moat: the insurance float 💰

The biggest moat of Berkshire Hathaway ($BRK.B) (-1,93%) is the insurance float, a stream of capital that provides additional investment power year after year.

1. what is behind the float? 🏦

Insurance companies collect premiums today, but often do not have to settle claims for years. During this time, Berkshire can invest the capital.

Normal companies have to pay interest on capital. Berkshire, on the other hand, even gets paid for holding capital through solid underwriting.

The float has grown from a few million dollars in the 70s to over 170 billion USD today.

2. why this is so strong 🔄

Structural advantage: The float is not a random product, but an integral part of the insurance model.

Independent of individuals: Buffett and Munger made the concept great, but it lives on through the strength of insurance subsidiaries like GEICO or General Re.

Investment freedom: Capital flows continuously and can be flexibly invested in shares, bonds or entire companies.

3. opportunities for investors 📈

Stability: The float remains in place even after a change of management.

Crisis strength: In market downturns, Berkshire remains liquid while other companies experience capital problems.

Growth: The larger the insurance division, the more capital is available for new investments.

4. conclusion 👉

Buffett and Munger were the architects, but the float is the foundation.

For investors, this means that the float is the silent engine in the background and ensures that Berkshire retains its enormous investment power in the future.

6 Comentários

Soprano@Soprano

What is that horrible latently anti-Semitic AI picture again? 😭

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DerArbeiter@derWaldgaenger

@Soprano because someone is rubbing their hands? oh vey you can also exaggerate. by the way, Arabs are also Semites

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Soprano@Soprano

@derWaldgaenger Who cares about Arabs, but hey, where are the sneering guys posing in front of a pile of money not inspired 1:1 by the happy merchant cartoons?

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DerArbeiter@derWaldgaenger

@Soprano Why are there such prejudices? They make up 2% of the US population but occupy 80% of ministerial posts under Biden, lobbying and monopolizing. The biggest pharma scandal came from Martin Shkreli who bought the license of Daraprim and increased the price by 5000%. From 13.50$ to 750$. The biggest financial scandal Bernie Madoff also took 50MRD from 4500 investors. Best known pedophile Jeffrey Epstein who has a double passport and probably ran a blackmail operation. Lecturer at a private university without an education, then investment banker, then multimillionaire. Then you ask was an AI greed and unscrupulousness associated with them? Not all of them are like that, but they seem to be overrepresented.

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Soprano@Soprano

@derWaldgaenger Let me just say that I think you read interesting books, as I can tell from your name.

But I would put it this way. I'm not disagreeing with you that certain groups are overrepresented in certain leadership positions. But the thing is, look at how many leadership positions in English-speaking countries have been taken over by Indians. Or how much of Europe already belongs to the Chinese.

So I don't know if it's the right way to accuse the Jews of supposedly controlling everything. Because it seems that everyone else apart from us is also trying to expand their power.

If we Caucasian Europeans are losing in this game, then maybe we should just get better at playing instead of complaining that the others are winning.

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Kai@Kai_

@Soprano The picture shows Warren Buffett, Greg Abel and Charlie Munger in the background.
These are well-known heads of Berkshire.
That's all there is to it and the picture has nothing to do with anti-Semitic caricatures.
I didn't mean to imply anything like that.
I was only concerned with the content of the article, i.e. the insurance float.

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