Beyond Wall Street: Warren Buffett’s Multi-Dimensional Success Story – Private Jets, Insurance Glamor and Candy – Apple (NASDAQ:AAPL)

Warren Buffett, often described as the Oracle of Omaha, is one of the most successful investors of all time and the sixth-richest man in the world, with a net worth of $121.1 billion, according to Forbes’ Real-Time Billionaires List.

While many people believe that Buffett’s net worth comes from his smart investments, he owns several highly profitable companies through his holding company Berkshire Hathaway Inc.

“First, we invest in companies we control, typically buying 100% of each,” Buffett wrote in Berkshire Hathaway’s 2022 shareholder letter. “Berkshire directs capital allocation in these subsidiaries and selects CEOs who make day-to-day operating decisions.” “In the second category of ownership, we buy publicly traded stocks through which we passively own parts of companies.”

Investing in insurance

Berkshire Hathaway owns several insurance companies, including Berkshire Hathaway Guard Insurance Company, Berkshire Hathaway Specialty Insurance Company, Gateway Underwriters Agency, GEICO, General Reinsurance Company, Medpro Group, National Indemnity Corporation, and American Liability Insurance Group.

Berkshire Hathaway generated $21.36 billion in premium revenue in the third quarter ended Sept. 30, reflecting a roughly 14% year-over-year rise. By comparison, Buffett’s total income from interest, dividends, and other investment income was $4.05 billion.

Berkshire’s operating profit was $10.76 billion in the third quarter, up 40.6% from the same period a year earlier. Dividends include profits generated by several wholly owned companies, including insurance, railroads, and public utilities.

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Gecko recovery

Buffett said auto insurance company GEICO is the “crown jewel” of Berkshire Hathaway’s insurance business and is his “favorite child.” But GEICO capitulated to rival Progressive in 2022, leading the company to report a pre-tax underwriting loss of $1.9 billion in the fiscal year.

Buffett’s favorite child managed a stellar comeback, with GEICO reporting pre-tax underwriting profits of $1.05 billion in the fourth reported quarter, marking the strongest performance since the first quarter of 2021.

Volatile income from investments

Buffett’s investments lost nearly $13 billion in value in the third quarter, primarily due to the poor performance of the company’s shares. Apple company (NASDAQ:AAPL). This led Berkshire Hathaway to report a loss per share of $5.88 on Class B shares.

Buffett has been vocal about the benefits of holding stocks for long periods rather than panic selling in a market downturn. Apple shares, which temporarily fluctuated last year amid weak sales expectations, have risen nearly 40% over the past year.

Private planes

Buffett owns NetJets Inc., a corporate jet leasing company that he acquired in 1998. The company has been bleeding financially, having suffered significantly since the Great Recession of 2008. The company reported a net loss of $711 million during the recession.

Buffett restructured NetJets and changed its management, appointing Adam Johnson, an aviation industry veteran, as CEO. Since then, the company has turned 180 degrees to become one of the largest private jet charter companies in the world.

Adam Johnson performed; “You can’t believe what he did with this business,” Buffett told Forbes in May. “It’s been a difficult model for a long time, but (Johnson) got it where it is now, and we should have a great company forever.”

In May last year, NetJets signed a deal with Embraer to deliver 250 Praetor aircraft starting in 2025 for more than $5 billion.

Buffett’s dream project: candy

Buffett’s diverse business ownership has increased his net worth over the years. He also owns See’s Candies, which he considers his “dream business.” Since purchasing the company in 1972, See’s Candies has generated nearly 8,000% in revenue as of 2019.

“We invested $25 million in it, and it gave us over $2 billion in pre-tax income, so over $2 billion,” Buffett said at Berkshire’s 2019 annual shareholder meeting.

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