Warren Buffett’s Berkshire Hathaway is massive in both scope and scale. The holding company, worth $559 billion, owns businesses ranging from insurance to furniture to energy utilities to chocolate.
In his annual letter to Berkshire Hathaway shareholders, Buffett shared an unfortunate story that “underscores the wide scope of Berkshire’s operations.“ “Since 2011, we have owned Lubrizol, an Ohio-based company that produces and markets oil additives throughout the world. On September 26, 2019, a fire originating at a small next-door operation spread to a large French plant owned by Lubrizol,” he said.
“The result was significant property damage and a major disruption in Lubrizol’s business,” he continued. “Even so, both the company’s property loss and business-interruption loss will be mitigated by substantial insurance recoveries that Lubrizol will receive.”Unfortunately, what’s good for Lubrizol is coming at the cost of another one of Berkshire’s businesses.
“But, as the late Paul Harvey was given to saying in his famed radio broadcasts, ‘Here’s the rest of the story.’ One of the largest insurers of Lubrizol was a company owned by ... uh, Berkshire.”“In Matthew 6:3, the Bible instructs us to ‘Let not the left hand know what the right hand doeth.’ Your chairman has clearly behaved as ordered,” Buffett said.Sam Ro is managing editor at Yahoo Finance.
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