A comely conglomerate

Warren Buffett is widely considered to be one of the best investors in history. The value he has created for Berkshire Hathaway shareholders has become apparent over the past decades, as Berkshire’s collection of wholly owned subsidiaries has expanded, increasing the company’s cash-generating capabilities.

Berkshire’s market value was recently $450 billion, while the value of its stock portfolio was $148 billion at the start of the year. In other words, Berkshire’s nonstock holdings are worth close to $300 billion. The cash flow thrown off by these diverse businesses gives Buffett the ammunition for his elephant gun, and it’s the quality of the businesses that has them generating so much consistent profit.

Today’s Berkshire is an amazingly diverse company. Its subsidiaries range across multiple industries, including railways, regulated utilities, insurance, consumer goods and industrial manufacturing. Some of its subsidiaries are Geico, Benjamin Moore, Brooks, Duracell, Justin Brands, See’s Candies, International Dairy Queen, Fruit of the Loom and the massive BNSF railroad. This combination limits Berkshire’s exposure to any single industry and tempers the effect of weak consumer spending in a recession.

Buffett has built an incredible business. The most amazing thing about it may not be what it has become under his leadership, but how strong it is set to remain after he’s gone. (The Motley Fool owns shares of and has recommended Berkshire Hathaway.)