We Study Billionaires - The Investor’s Podcast Network
Business:Investing
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
NEW TO THE SHOW?
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
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.
RWH031: Abundance w/ Michael Berg
TIP571: Charlie Munger & The Psychology of Human Misjudgment
BTC143: Local Bitcoin Education & Meet-ups w/ Rod Roudi (Bitcoin Podcast)
TIP570: Back Together w/ Stig Brodersen and Preston Pysh
TIP569: An Investor's Guide to Clear Thinking w/ Chris Mayer
BTC142: Bitcoin Policy Update Q3 2023 w/ Perianne Boring (Bitcoin Podcast)
TIP568: Current Market Conditions, Alternative Assets, & AI w/ David Stein
BTC141: Can Bitcoin Lightning Scale Globally w/ Alexander Leishman (Bitcoin Podcast)
TIP567: The Evolution of Value Investing w/ Brian Feroldi
BTC140: Game Theory and Bitcoin w/ Scott Lindberg (Bitcoin Podcast)
RWH030: From Poverty To Power w/ Arnold Van Den Berg
TIP566: The Passionate Pursuit of Lifelong Learning w/ Gautam Baid
BTC139: Educating the World On Bitcoin w/ John Dennehy (Bitcoin Podcast)
TIP565: Why Buffett is Doubling Down on Japan w/ Dan Rasmussen
TIP564: Capitalizing on Commercial Real Estate Trends w/ Charles Clinton
BTC138: A Progressive's Case for Bitcoin w/ Jason Maier (Bitcoin Podast)
RWH029: Beyond Rich w/ Pico Iyer
TIP563: Lightning in a Bottle & Microcap Investing w/ Ian Cassel
BTC137: Bitcoin Functions Like A Biological Network w/ Brandon Quittem (Bitcoin Podcast)
TIP562: How to Cope With Market Cycles
Create your
podcast in
minutes
It is Free
The emPOWERed Half Hour
Forward Guidance
Macro Voices
Money Girl
So Money with Farnoosh Torabi
The YNAB Podcast