The company’s founder, Oliver Chace, had previously worked for Samuel Slater, the man who founded the first successful American textile mill. Chase himself founded his first mill in 1806, and was 70 years old in 1839, when he created the Valley Falls Company.
There’s not too much to say about the first 100 years of the company, other than that Chace had a good innings and lived to the ripe old age of 82. In 1929, the Valley Falls Company merged with the Berkshire Cotton Manufacturing Company and became Berkshire Fine Spinning Associates.
You can probably guess what happened next. In 1955, Berkshire Fine Spinning Associates merged with the Hathaway Manufacturing Company, and the newly formed company was named Berkshire Hathaway.
At the time, the company had fifteen plants and employed 12,000 people, making $120 million every year. But within five years, half of the locations had been closed and a huge number of people had been made redundant.
Enter Warren Buffett, the iconic all-American businessman. He started buying stock in the company, eventually buying enough to take control, but Berkshire Hathaway was struggling and the textile industry was on the wane. That’s why they turned to the insurance industry, although it wasn’t until 1985 that the final textile mill was shut down.
Berkshire Hathaway continued to grow under Buffett’s leadership, mostly by investing in other companies or even buying them out entirely. It’s now recognized as the world’s largest financial services company and the third-largest public company in the world.
Buffett himself has profited substantially too, with a net worth of $86 billion that makes him the third richest person in the world. And yet despite that, he’s not just sitting on his cash and watching it accumulate. Instead, he’s put up cash alongside long-time friend Bill Gates (the second richest person in the world), investing heavily in the Bill and Melinda Gates charitable foundation.
By the end of 2019, Berkshire Hathaway was in possession of $122 billion in cash and cash equivalents, with subsidiaries including the Acme Brick Company, Dairy Queen, Duracell and Fruit of the Loom.
They also have substantial investments in many of the most well-known companies in the world, from Amazon, American Airlines and Apple to Visa, Verisign, and Verizon. In fact, if Berkshire Hathaway invests in a company, it’s a pretty good sign that the company’s going to be a success, which is just one of the many reasons why we’ll be keeping our eyes peeled on the moves that they make in the months and years to come.
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