Berkshire's new CEO makes explicitly clear what this business is really about 🎯

All publicly traded companies share the same top priority 🤔

There are many ways a company will describe its business.

Sometimes they’ll be vague and philosophical. (“We provide lifestyle solutions.”) Sometimes they’ll tell you a bit about their business strategy. (“We leverage an ecosystem by offering a growing suite of goods and services.”) Often, they’ll just highlight their product. (“We sell washing machines.”)

As someone focused on investing in publicly traded companies, I appreciated how Greg Abel, Berkshire Hathaway’s new CEO, bluntly described his company in a new letter to shareholders.

“Berkshire is a unique conglomerate, intentionally designed to allocate capital rationally and efficiently,” he wrote (emphasis added). “Insurance is our core, and we also hold substantial investments in businesses across many other sectors.“

It’s telling that he highlighted the importance of allocating capital before describing any industries in which the company is engaged.