Warren Buffett’s Berkshire Hathaway Joins Trillion-Dollar Club: Journey to Wall Street’s Elite

Wall Street has given Warren Buffett an early gift on his ninety-fourth birthday.

A gift, that’s also a fitting tribute to the legendary investor who has spent over eight decades in the stock market.

What’s the gift we are talking about? Let’s dive in.

Only a handful of companies in the United States have crossed the trillion-dollar valuation mark!

And of those who have, so far all of them have been tech companies.

But now, this exclusive trillion-dollar club has welcomed its first non-tech member.

Warren Buffett’s Berkshire Hathaway has become the first non-tech company to get past the trillion-dollar valuation mark on Wall Street.

While doing so, the Nebraska-based firm has joined the likes of Apple, Nvidia and Microsoft, which have their market capitalisation north of trillion-dollars.

Google’s parent company Alphabet and Facebook’s parent Meta are also a part of the trillion-dollar club.

The only publicly traded, non-tech company to have hit this milestone is outside the United States. Saudi Arabia’s state-owned oil-and-gas behemoth Saudi Aramco is valued at around two trillion dollars.

So, how did Buffett’s Berkshire Hathaway reach here? Let’s do a rewind to find out.

Warren Buffett started investing at the age of 11 – yes, you heard that right. He was not even a teenager when he made his first bet in the stock market and later sold it for a cool 4.6 percent profit.

This early interest in investing led to Warren Buffett also seeking an educational path which helped him get an in-depth understanding of economy and stock markets.

In 1951, after graduating from the University of Columbia with an MSc in Economics, he joined his father’s firm as an investment salesman, where he worked for around three years.

This was followed by a two-year long stint as a securities analyst at Graham-Newman Corp, a partnership founded by legendary investor Benjamin Graham. However, in 1956, Graham decided to retire.

By this time Buffett had saved 174,000 dollars – that’s equivalent to almost a million and a half dollars in today’s times.

These savings gave Buffett the fuel to launch his own investment partnerships.

By 1959, Buffett, also known as the Oracle of Omaha, had seven such partnerships. This was the year when he met his lifelong friend and investment partner Charlie Munger.

1962 marked a pivotal year for Buffett: his net worth crossed the million-dollar mark, and he began consolidating his now 11 partnerships.

Simultaneously, he started acquiring shares in Berkshire Hathaway, then a textile company.

By 1965, Buffett had taken control of Berkshire, but recognizing the textile industry's decline, he swiftly moved to diversifying the company's investment portfolio.

Berkshire Hathaway’s key initial investments beyond textile were in the insurance industry in the National Indemnity group of companies and the Government Employees Insurance Company. Even today, these companies are at the core of Berkshire Hathaway's insurance operations.

In 1970, Buffett took over as the chairman of the company, where he is also the largest shareholder. Under his leadership, the company transformed into a diversified multi-national conglomerate, buying stakes in companies such as Coca Cola, Apple, Kraft Heinz and Bank of America.

Since Warren Buffett began buying Berkshire Hathaway shares in 1962 for around 7.6 dollars each, the stock has also undergone a remarkable journey.

A single Class A share of Berkshire Hathaway is worth almost 700,000 dollars, making it one of the most expensive stocks in the world.

During this journey, Berkshire Hathaway became a billion-dollar company in 1983, and Warren Buffett earned his first billion dollars by 1986, at the age of 56.

And now, it has hit the trillion-dollar mark, while Warren Buffett is the world’s sixth richest person.

But the legendary investor believes that Berkshire Hathaway was his worst trade. He thinks had he invested directly in insurance stocks, it would have potentially generated an additional 200 billion dollar in compounded returns over the subsequent decades.