Question

Which of the following is true about Berkshire Hathaway?

a. As of December 31, 2014, Berkshire Hathaway’s diversified holdings included Amazon, BNSF, Walmart, and GEICO

b. None of these

c. In 1965, Buffett and partners gained control of Berkshire Hathaway as an investment in a successful financial institution.

d. Berkshire Hathaway was incorporated in 1889 as Berkshire Cotton Manufacturing and merged with Hathaway Manufacturing.

Which of the following is true about Berkshire Hathaway’s acquisition of PCP?

a. All of these

b. Purchased PCP at $22.50 per share in cash

c. Valued PCP’s enterprise value (market value of equity plus debt) at $45

d. Was the largest deal ever completed by Berkshire

Buffett’s motive for the PCP acquisition was most likely:

a. Margin expansion from a turnaround of PCP’s failing business strategy

b. All of these

c. Earning power derived from PCP’s oligopoly position in the aerospace parts market

d. New strategic direction by replacing PCP’s current CEO

Answer 1

1. a. As of December 31, 2014, Berkshire Hathaway’s diversified holdings included Amazon, BNSF, Walmart, and GEICO. (Answer)

1839- Berkshire Cotton- NOT a Financial Institution.

2.
D.Was the largest deal ever completed by Berkshire - About $38 billions @ $235 per share. (Answer)

3.
C. Earning power derived from PCP’s oligopoly position in the aerospace parts market. (Answer)

It is it's a moat. It was brought at a P/E of 18.5