Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) has crushed the S&P 500 (SNPINDEX: ^GSPC) over the last 60 years thanks in part to savvy investment decisions about long-held stocks like American Express and Coca-Cola — and more recently Apple. But Berkshire’s stakes in public companies may no longer be the driving force behind its success.
On May 3 Berkshire published its first-quarter results, which included a new record position in cash, cash equivalents, and investments in U.S. Treasury bills of $342.39 billion. As of May 2, the value of Berkshire’s public equity portfolio was $277.41 billion, or roughly a quarter its market cap of $1.16 trillion. The rest of Berkshire’s value comes from its subsidiaries.
Berkshire has plenty of valuable wholly-owned businesses, from the BNSF railroad to utility giant Berkshire Hathaway Energy. But by far the most important category is its property and casualty (P&C) insurance businesses. At Berkshire’s annual shareholder meeting on Saturday, investors had plenty of questions about the future of the P&C businesses: from how they will fare in the face of an onslaught of private equity investment to the changing landscape of insurance in the autonomous age.