Warren Buffett took over Berkshire Hathaway out of pique and later called it his worst mistake
In 1964 the boss of a struggling Massachusetts textile firm agreed to buy back Warren Buffett's shares for 11.50 dollars each, then sent a written offer an eighth of a dollar lower. Angry, Buffett bought control and ousted him. He later reckoned that grudge cost him about 200 billion dollars in forgone returns.
Berkshire Hathaway was formed in 1955 when two New England mill companies merged, leaving it with 15 plants and more than 12,000 workers, though seven sites closed before the decade was out. Buffett began buying in 1962 at 7.50 dollars a share, expecting to profit as mills were sold off. After manager Seabury Stanton undercut their deal, Buffett's fund kept buying, and Stanton and his son resigned in 1965. The last textile operations closed in 1985. Buffett has said he would have done far better putting the money straight into insurance.
Insurance became the engine anyway. In 1967 Berkshire paid 8.6 million dollars for National Indemnity of Omaha, its first deal under Buffett. It began buying into the troubled insurer GEICO in 1976 and took full ownership in 1996. The 1972 purchase of See's Candies for 25 million dollars had returned more than 2 billion by 2019, even though half its sales come in November and December.
Later purchases ranged widely, from Nebraska Furniture Mart and Dairy Queen to the private-jet operator NetJets and the paint maker Benjamin Moore. The jeweller Helzberg Diamonds joined after Buffett happened to meet its owner on a New York street. Not everything pleased him; he said he overpaid for the reinsurer Gen Re in 1998.
The results made Berkshire the textbook conglomerate. From 1965 to 2023 its shareholders earned 19.8 percent a year compounded against 10.2 percent for the S&P 500. Because the board has resisted splitting the stock, a Class A share reached 700,000 dollars in August 2024, when the company passed a trillion-dollar valuation. Its Omaha head office employed just 27 people at the end of 2024, and Greg Abel took over as chief executive in 2026.
Source: Berkshire Hathaway
