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well howdy there folks I hope y'all having a great day out there welcoming the financial education channel if you're talking about a stock that I'm surprised I ain't never bought before it's this stock we're talking about here today Cowboys it is Berkshire Hathaway a lot of people know about Warren Buffett they know this guy is one of the richest guys in the world or something like 82 billion dollars and people are very confused on like how he made the money where his wealth is held people think like he just like buys a bunch of stocks or something like that or he has some big investment fund when actually he owns a company named Berkshire Hathaway and that's what we're talking about today this company that he is part owner of and this is where his wealth is held in this particular company called Berkshire Hathaway you and I we can buy shares of this stock okay and this is stock I'm very surprised I've never bought before cuz I'll always have looked up to you know Warren Buffett as a legend a lot of my investing disciplines or things that I've stolen from him over time I studied like how he looks at a stock how he judges is talking what not what's a good stock versus bad stock and although we don't you know 100% agree on all the stocks out there some stocks he buys I wouldn't buy some stocks that you know I would buy that he wouldn't buy or vice versa right but at the end of the day we would agree on most situations we would agree that most stocks we would want to be a part of and we would agree that some of these stocks are phenomenal stocks so this company I'm super surprised I've never bought the stock before and it's starting to look very very interesting I want to take a deep dive into this one today so if you didn't know this Berkshire Hathaway company they have a big ownership stake in a ton of companies I mean a ridiculous amount of companies okay I'm talking like 50% or more ownership okay Acme Brick Company one of the biggest BRIC players out there they own that company outright been bridge jeweler don't you guys know that commercial your personal jeweler then bridge well if you grew up in Arizona and ever listen to the radio you'd know that commercial okay he owns it this guy doesn't buy jewelry he owns jewelry companies okay Benjamin Moore one of the biggest paint players out there pretty much everybody knows Benjamin Moore right they own that company Burlington Northern Santa Fe Railroad cup we're talking about one of the biggest railroads and not just the United States of America but in the world they own a hundred percent of this business okay and we're just we're just hacked with some of them okay this is how this is just a ridiculous amount of companies they own okay 100 percent ownership stake in Clayton Homes so if you live in a Clayton home that company is owned by Warren Buffett cord business services which makes a ton of furniture related products that sell into big companies that have offices they own that business Dairy Queen you ever got a blizzard before they own it Duracell the battery company you ever had a Duracell battery they own it you've got some fruits on your looms oh they own that business too ok Geico a lot of you guys watch this you probably have GEICO insurance they own the business 100% and by the way very interesting thing that he's always done with Geico is he bought that business back when it was a very very small business back and I believe like around the 60s and what he's always been able to do with Geico is basically all that insurance premium they collect go ahead and invest that money make that money into even more money while you wait for basically the payout you know for somebody getting an accident or something like that okay always been a very successful company and one of the one of the main reasons this company makes so much money year in and year out Helzberg Diamonds another big diamond player man this guy doesn't wear jewelry and yet he owns old jewelry companies he must knows what people want they own 100 percent of a company and my grandpappy used to work for called Johns Manville Isis how to give that one a shout out cuz I remember my granddaddy used to work there back in the day back when they made asbestos products interesting huh Lubrizol massive chemical player they owned a hundred percent ownership stake they bought that company for I think it was a little under ten billion dollars back in 2011 McLain have you ever worked at a grocery store or you know all Walgreens or Walmart or somewhere like that you probably know McLane company okay the Nebraska Furniture Mart they own 80 percent stake in that one of the biggest Furniture Mart's you'll find in a literally the entire world it's insane okay net Jeff which basically offers private jet services without having to actually own a private jet NV Energy every time I pay my electric bill in the house okay more buffets making some of that money they have almost a 91 percent ownership stake in NV Energy Pacific that's a massive electric player in California okay another one they own about 91% of pilot Flying J this is a kind of a recent purchase happen in 2017 which is a big gas station brand if you ever you know travel on the interstate highway system you're gonna come across a lot of pilot flying J's they have about a 38% ownership stake in them RC Willey home furnishings Russell Brand's See's Candies along with a lot more businesses they own pretty much the entire business okay so when you're buying into Berkshire Hathaway stock you're getting all these businesses that you own a lot of them are very good businesses a few of them might not be such good businesses but a lot of them are very good businesses pretty much almost all those businesses are profitable that's what Warren Buffett likes to buy profitable businesses okay so need to say you you you get that side of business Kane you also get a ton of investments Warren Buffett in Todd and Ted the other two guys that run money for Berkshire Hathaway they're constantly investing money in publicly traded companies that they believe they're gonna make a lot of money on because the companies are undervalued okay they have massive positions of some of these companies we're talking they own fifty two thousand dollars worth of Verizon Corporation we're talking they owned over two million dollars worth of rbl Bank we're talking they own six million dollars worth of ups wait a minute wait a minute I sorted that wrong I apologize okay those numbers might have been big for my portfolio okay but not for Warren Buffett we're talking over 40 billion dollars worth of Apple stock how insane of a stake is that over 40 billion dollars just an apple stock alone Bank of America they have over twenty two billion dollars worth Wells Fargo over twenty billion dollars worth you add up those numbers we're talking you know eighty three eighty four billion dollars worth of just three stocks alone okay coca-cola it's a position he built a huge and back in the 1980s about nineteen billion dollars worth of Coca Cola imagine the dividends imagine the amount of money Berkshire Hathaway makes just in dividend money from those for stocks Peters talk about Coca Cola Wells Fargo Bank of America Apple it's it's in the billions of dollars it's absolutely insane just how much money they make off just dividend each and every year American Express they have a seventeen point seven billion dollar stake in American Express corporation okay the Kraft Heinz Company we're talking over a ten billion dollar stake and there's a whole host of companies we could continue to go through we go through a you know massive list of basically companies that they have less than ten billion dollars so like you know anywhere from hundreds of millions invested to several billions invested okay so they have a ton of ownership stake in a ton of companies those companies are generally companies that are growing and doing very well and it'll most of them honestly pay off ton of dividend money to Berkshire Hathaway which that money either sits on Berkshire Hathaway's balance sheet until it gets reinvested or works your Hathaway just holds that money in cash okay now once again Warren Buffett this is an investing legend so when you buy you to Berkshire Hathaway you're buying into Warren Buffett but you're buying into Warren Buffett kind of you know I don't know how to put this nicely but the guy's about to turn 90 years old very soon okay guys gonna turn 90 years old so you're getting the tail end of Warren Buffett needless to say but you're still giving Warren Buffett and I still watch you know Warren Buffett's most recent interviews he does sometimes I see him be seeing whatnot and the guy is still very much with that okay most 90 year olds if people are even fortunate enough to make it to 90 years old they're like days didn't confuse I can tell you Warren Buffett is anything but dazing confused that guy he knows exactly what's going on he still knows how to judge companies overall but on the flip side he has missed a lot of opportunities over the past decade or so just because he has kind of aged out of kind of knowing what is going on as far as the new up-and-coming huge companies and why a lot of these new companies are you know gonna be a lot bigger in the future so you know doesn't miss out on that but he does have targets head running money who are very successful hedge fund managers who now you know are kind of gonna take the mantle in terms of investing money over the long term and I just Warren Buffett as being a good judge of character you don't build a company to be a five hundred billion dollar company without being a good judge of character without being able to hire people that are very good at their job so I do have a lot of faith in Warren Buffett okay now if you're wondering how the heck can't even buy Berkshire Hathaway stock you can buy Berkshire Hathaway stock and you don't need 320 $9,000 okay that's how much it costs for an Asian so a lot of people were never even able to buy in this talk because it usually traded above $100,000 a few years back they basically made us to buy B shares which is part of an Asia and those shares are about two hundred and nineteen dollars a share now let's take a moment here and talk a bit about the valuation of Berkshire Hathaway and why this stock is actually very interesting to me as a potential buy stock okay so if we look at Berkshire Hathaway is a company with a market cap of about you know five hundred and thirty-four billion so a very very big company needless to say we're talking about one of the biggest companies in the world and this one trades at a piece somewhere around 20 now it has gotten a little more confusing in terms of what with the net income will be in a given year for Berkshire Hathaway because of some bad accounting changes done by the government in my opinion we're basically now a company you know if a company owns a ton of stocks like Berkshire Hathaway if those stocks go up they have to record that as like you know profit made even though it wasn't profit it's really silly the way it's done now in a lot of ways it gives a false interpretation of how much money a company's actually making or losing when exact big huge company like Berkshire Hathaway that has a ton of investments and publicly traded companies it's a little more murky there but neither say we're looking at a piece um where around 20 for this company talking about a market cap of a little over 500 billion we're paying for this company okay now we're getting a company that should have revenues of anywhere between 250 to 300 billion dollars a year a lot of that will be dependent on how the overall economy does assuming the overall economy just grows at least a little bit per year let's say 1 to 2 percent per year growth like that should be very very good for a company like Berkshire Hathaway however on the downside this is a company that owns so many stocks in so many different industries that if the economy ever got hurt in a real you know big way let's say a big recession the underlying businesses so many of those would be hurt at least in the short term but we're getting a super profitable business and we're getting a business that should produce you know 250 or 300 billion dollars in revenue year in and year out ok where it gets a lot more interesting as around the balance sheet so you go ahead and look at the cash and cash equivalents in the short term investments for Berkshire Hathaway as of right now we're talking about a billion dollars it never mind not after the next quarter these numbers should be over a hundred and forty million dollars assuming there's no massive buy out there for Berkshire Hathaway in the short term so we're talking about a company I'm gonna get here that's gonna have 130 140 if I'm buying it today you know billion dollars on their balance sheet in just cash and cash equivalents and short-term investments which is essentially money that can be deployed at any time in many different stocks or just buying businesses outright okay that is very very interesting also they own over 300 billion dollars worth of equities or other investments remember we went through all those different stock sale remember we went through all those different businesses they owe that a on part of right all those are in that line item 300 billion plus dollars that's a lot of coin Berkshire Hathaway has so they have a ton of assets on that balance sheet okay now they do have 97 billion in debt but once again because they have so much in cash and short-term investments they could essentially pay off that debt overnight if they really wanted to in terms of the total stockholder equity with this company so it was four hundred billion dollars and keep in mind we're paying a marquis cap on this company of you know a little over five hundred billion dollars so if stockholder equity is very interesting where it's at with a company like Berkshire Hathaway so if I'm looking at Berkshire Hathaway this is interesting for two points for me okay the first point is I just think this business is gonna do well over time I think it's gonna continue to grow I think it's gonna do well over time and I think if you're looking at any five to ten year span I think it's almost automatic money that you would make money in a five to ten year span with the stock there's just question is how much money will you make in a stock like Berkshire Hathaway okay Warren Buffett's company here but the other reason it's even more interesting to me other than just you know kind of buying it's almost like buying an index fund but a more focused index fund the other reason is very very interesting to me is what I call a hedge bet okay so hedging your bets is a betting strategy which involves placing bets on different outcome to your original bet to secure a guaranteed profit regardless of the result or reduce your risk in a market and this is why this stock is very very interesting to me because if I look at Berkshire Hathaway with all that cash on their balance sheet and what they're like they continue to build back those cash levels if I'm thinking about the talk of you know a recession could a recession come when's the next recession come if I think about that and I think about what's gonna be one of the companies that's in the best position to capitalize on a recession Berkshire Hathaway is one of the top five companies in the world in my opinion that will actually benefit in a massive massive way long term from a short-term recession and the reason being is generally speaking when recessions happen stocks go down business valuations go down and a company like Berkshire Hathaway that might have you know a hundred and forty billion dollars on the balance sheet very soon and maybe they'll build it up to two hundred billion dollars they're gonna be in a huge position of power where they're gonna have so much money that they can scoop up a ton of companies for a very very cheap and for that reason this stock has it has you know it has my attention now let's put it that way because if I'm looking like this I can say this stock is a hedge position I have which essentially if a recession happens they're gonna likely benefit in a massive way because Buffett is the math if you look at some of the deals Buffett orchestrated in 2008 2009 2011 2010 some of those years where we are you know in the recession or coming out of the recession you orchestrated some amazing deals for Berkshire Hathaway so if I think about a company that's gonna be in a huge position of power in the next recession look like that one of the first ones that comes to mind is gonna be Berkshire Hathaway so I'm very actually interested in buying the stock just based upon a hedge bet on if the recession happens over the next few years they're gonna be ones that scooped up some great companies for some very cheap valuations okay so just in case it's a hedge bet out there so that's why I'm very actually interested in Berkshire Hathaway stock along with the valuation I think this company's going to do very well over the next 10 20 years in the future and for those reasons I'm actually really interested in Berkshire Hathaway stocks for the first time ever my 10 plus years to be in the stock market believe it or not so let me know your opinion on Warren Buffett and Berkshire Hathaway down there in that comment section I would love to hear from you guys as always make sure you smash the thumbs up button if you enjoy me sharing this video with you here today the thank you for watching and have a great day
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