I've been reading about Warren Buffett and Berkshire Hathaway lately. This is one of those stories you read and you really wish you had a time machine to go back to the past and make the same moves someone made.
Buffett bought a textile company back in the 1960's. Not exactly the most exciting investment, at that time and even now but somehow over time, he grew this small textile company into a huge conglomerate of businesses, like railroads, insurance companies and several pieces of Apple and Coca Cola. According to Forbes, they now have ownership of over 60 different companies. Just one of those companies can change your fortunes for life.
The main point I want to share though is the time it took. Just think about how much patience it must have taken to acquire all of these companies through a textile company. Imagine you buy a struggling textile business and continue to add to your portfolio just staying the course with your first investment. Most people would have cut their losses or moved on to something more exciting by now. But Buffett continued to build his company, adding piece by piece, until it transformed into something completely different than what it started out to be.
This makes me think whether or not Warren Buffett is a genius or just very stubborn or possibly both.
With the insurance part, in retrospect, this actually makes more sense. The insurance companies receive cash when they sell the policies. This provides them with available funds to invest for future returns and the hope is they will have this money available to pay the claims when they are due. With the railroads and consumer goods, well I guess those are good businesses because they generate steady revenues. But, to transition from a textile manufacturer to a business that owns a portion of tech companies is an insanely unpredictable journey he took.
What I keep thinking about is how much longer his outlook is than ours. My guess is, decades compared to our quarters. I can't envision operating on this long of a timeline while most of us are trying to get through just one week.
