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Berkshire Hathaway Case AnalysisBerkshire Hathaway’s Investment StrategyBerkshire Hathaway Inc. has almost a “personality cult” organizational culture which essentially revolves around one man and his investing prowess. The man’s name is Warren Buffett, the “Oracle of Omaha.” Historically, Berkshire Hathaway’s business model has been to purchase insurance companies. One great thing about insurance companies is the “cash float,” which works as follows. Suppose that a person purchases a $100,000 whole life insurance policy from Berkshire Hathaway and pays premiums of $4,000 per year to Berkshire for this policy. The Berkshire Hathaway company is obligated to pay the $100,000 death benefit when the person dies; in the meantime it gets to invest the $4,000 per year “float.” Warren Buffett, who has been a very savvy investor, has made a huge fortune from investing this float money. But recently, Berkshire Hathaway has been moving away from purchasing insurance companies with large floats and has been buying major industrial businesses instead. In 2010, for example, it completed a $44 billion purchase of one of the nation’s largest railroads, Burlington Northern Santa Fe (BNSF). Berkshire paid for this acquisition with $15.8 billion in cash it had on hand, and the remainder in Berkshire Hathaway stock. Mr. Buffett, who was born in 1930, is now well beyond the age when most workers retire.For this activity, answer:How does Mr. Buffett’s age affect Berkshire Hathaway’s recent strategic moves such as buying Burling

ton Northern Santa Fe Railroad instead of another large insurance company?What does Berkshire Hathaway’s purchase of BNSF Railroad say about where Buffett thinks the price of energy (oil and gasoline) is going to be in the future?How does the energy efficiency of shipping goods via rail compare with shipping goods via truck or airplane?Things to Remember!Your case study should be two to three pages in length (not including title and reference pages).Your paper should be double-spaced, with 1-inch margins, in-text citations and references for all resources following proper APA formatting.3 hours agoREQUIREMENTS  Bus  INTAnswer preview…………The strategic choices undertaken by firms are based on the consideration of various crucial factors such as opportunity, potential profitability of the venture, and the company owner experience in conducting businesses in specific fields as well as the overall experience of carrying out business. Age and experience come in for the case in consideration of Mr. Buffet’s decision to acquire Burlington Northern Santa Fe Railroad (BNSF) instead of his core business in the insurance sector. Mr. Buffet’s experience in conducting various businesses in the insurance sector is a critical factor to the recent strategic move which has nothing to do with his age. The age factor, however, comes in given that the owner may not be actively involved in the day to day operation of the transport company which has to be run by other individuals hence….. APA 815 words
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