How to Utilize the Berkshire Hathaway Wealth Model in Your Own Life - Focus on Two Buckets of Value - Operating Income and Marketable Securities

One of the least understood secrets behind the success of Berkshire Hathaway and its rise from an $8 stock in the 1960’s to more than $118,000 per share today, is that Warren Buffett focuses on two value “buckets” as he put it in a recent shareholder letter. The first bucket consists of the operating businesses in which the company holds a controlling stake and the second of marketable securities such as stocks, bonds, mutual funds, et cetera, most of which are held through the insurance subsidiaries such as GEICO, General Re, or National Indemnity, just to name a few.

This two-pronged approach can be utilized in your own life, allowing you to amass far more wealth with much less risk. Continue reading ...