Berkshire Hathaway is a holding company, meaning it is a business that owns many diverse interests. What makes Berkshire of particular interest to a number of investors is that the company's investments are primarily managed by Chairman and CEO Warren Buffett. one of the most highly regarded investors ever. Colloquially known as "The Oracle of Omaha," where he resides, Buffett has made a number of successful investments for the company over the years. When you buy shares of Berkshire Hathaway, you own the companies that Buffett and his investment team, including long-time partner Charlie Munger, have hand-selected.
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Before you buy Berkshire Hathaway stock, you'll have to decide which share class you want. For most investors, the choice is easy -- as of June 2015, the Berkshire A shares traded for about $210,000 each, while the B shares traded at a more attainable price of around $140. For most investors, there is no difference between the two share classes except for the price -- the Berkshire A shares trade for 1,500 times the share price of the Class B shares. However, there are some technical differences. For example, Class A stockholders are allowed to convert into Class B shares at the 1,500-to-1 ratio at any time, while Class B stockholders cannot convert into Class A shares. Class A shares also carry significantly more weight when it comes to voting rights at annual meetings and other corporate elections. Each Class A share gets 10,000 votes, while each Class B share only gets one.
Opening An Account
Before you buy Berkshire Hathaway stock, you'll have to open an account at a financial services firm. The firm that makes the most sense for you will depend on your needs as an investor. If you are a new investor and anticipate needing help with your investment decisions, you might consider a full-service firm such as UBS Financial Services or Merrill Lynch.
While full-service firms offer access to professional advisers and Wall Street research departments, they often carry account minimums that may exceed the budget of the new investor.
Discount brokers such as Scottrade and Charles Schwab have more limited services compared to the big Wall Street firms, but typically charge much less for investment purchases. For example, as of June 2015 Scottrade would charge you $7 to buy either the A shares or B shares of Berkshire Hathaway using its website, while Schwab would charge $8.95 for the same trade.
After choosing your share class, finding a broker and opening your account, you're ready to make your trade.
If you're new to investing, you might want to get help from a professional regarding current market conditions before you make your purchase.
Tell your broker how many shares of which share class you'd like to buy. Make sure you have enough money to cover the cost of the shares and any commissions or fees your broker will add on to the top.
When you buy your stock, you'll technically have three business days until the settlement date to cover the purchase price. However, if you are a new client, your broker might request money from you upfront. Once you enter your trade, you'll be the owner of Berkshire Hathaway stock.
Stocks, including Berkshire Hathaway, can be volatile. There are no guarantees that your Berkshire Hathaway stock will go up in value, and you may end up losing your entire investment.