Clay Finck is joined by Jacob McDonough to discuss Berkshire's 1962 beginnings, Warren Buffett's turnaround, and its rise to a $800B valuation by 2023.Jacob McDonough is the author of the book Capital Allocation, which covers the financials of Berkshire Hathaway from 1955 through 1985, and he’s the host of the 10-K podcast, where he dives into the annual reports of various companies from decades ago, such as Geico and GM.IN THIS EPISODE, YOU’LL LEARN:00:00 - Intro.02:02 - Why purchasing Berkshire Hathaway’s stock was one of Buffett’s worst investment decisio...
Clay Finck is joined by Jacob McDonough to discuss Berkshire's 1962 beginnings, Warren Buffett's turnaround, and its rise to a $800B valuation by 2023.
Jacob McDonough is the author of the book Capital Allocation, which covers the financials of Berkshire Hathaway from 1955 through 1985, and he’s the host of the 10-K podcast, where he dives into the annual reports of various companies from decades ago, such as Geico and GM.
IN THIS EPISODE, YOU’LL LEARN:
00:00 - Intro.
02:02 - Why purchasing Berkshire Hathaway’s stock was one of Buffett’s worst investment decisions.
05:51 - How cheap Berkshire’s stock was when Buffett purchased it.
10:26 - The initial steps Buffett took to turn Berkshire’s business around.
13:12 - Why Buffett’s emphasis on cutting costs was so critical to Berkshire’s early success in the mid-1960s.
17:37 - The pivotal moment in 1967 that changed everything for Berkshire Hathaway.
20:06 - How National Indemnity’s valuation compared to the textile business.
27:27 - How insurance float helped supercharge Berkshire’s growth.
30:46 - The advantages Berkshire gained by getting into the insurance industry.
34:39 - What got Buffett and Munger into purchasing shares in Blue Chip Stamps.
39:40 - Buffett’s unconventional use of debt in expanding operations.
41:49 - What fueled the 1970s expansion phase.
54:05 - What led Geico’s stock to drop 96% in the 1970s.
62:30 - How Warren Buffett and Charlie Munger met.
65:11 - The financials and story of one of Berkshire’s best investments ever - See’s Candy.
72:32 - How Jacob thinks about different return metrics when analyzing a company.
75:26 - Jacob’s biggest takeaways from studying the history of Berkshire Hathaway.
Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.
BOOKS AND RESOURCES
- Check out our newly released TIP Mastermind Community.
- Check out our recent episode : TIP569: An Investor’s Guide to Clear Thinking w/ Chris Mayer or watch the video here.
- Jacob’s book Capital Allocation.
- Jacob’s podcast The 10-K Podcast.
- Follow Jacob on Twitter.
- Follow Clay on Twitter.
NEW TO THE SHOW?
- Check out our We Study Billionaires Starter Packs.
- Browse through all our episodes (complete with transcripts) here.
- Try our tool for picking stock winners and managing our portfolios: TIP Finance Tool.
- Enjoy exclusive perks from our favorite Apps and Services.
- Stay up-to-date on financial markets and investing strategies through our daily newsletter, We Study Markets.
- Learn how to better start, manage, and grow your business with the best business podcasts.
P.S The Investor’s Podcast Network is excited to launch a subreddit devoted to our fans in discussing financial markets, stock picks, questions for our hosts, and much more! Join our subreddit r/TheInvestorsPodcast today!
SPONSORS
- Invest in Bitcoin with confidence on River. It's the most secure way to buy Bitcoin with 100% full reserve custody and zero fees on recurring orders.
- Reach the world’s largest audience with Linkedin, the place to B2B. Plus, enjoy a $100 credit on your next ad campaign!
- Invest in some of the top private, pre-IPO companies in the world with Fundrise.
- Learn how Principal Financial can help you find the right benefits and retirement plan for your team today.
- Experience real language learning for real conversations with Babbel. Get 55% off your Babbel subscription today.
- Beat FOMO and move faster than the market with AlphaSense.
- Get a customized solution for all of your KPIs in one efficient system with one source of truth. Download NetSuite’s popular KPI Checklist, designed to give you consistently excellent performance for free.
- Choose Toyota for your next vehicle - SUVs that are known for their reliability and longevity, making them a great investment. Plus, Toyotas now have more advanced technology than ever before, maximizing that investment with a comfortable and connected drive.
- Send, spend, and receive money around the world easily with Wise.
- Be confident that you’ll be small businessing at your best with support designed to help you reach your goals. Book an appointment with a TD Small Business Specialist today.
- Invest in the same paintings available to billionaires, at a more accessible price point with Masterworks.
- Start, run, and grow your business without the struggle. Be in control of every sales channel with Shopify. Sign up for a $1 per month trial period today.
- Return to the all-access world of the rich and powerful. Don’t miss new episodes of Billions streaming now on Paramount Plus with Showtime plan.
- Support our free podcast by supporting our sponsors.
HELP US OUT!
Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds, and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it!
See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.
