How To Buy Berkshire Hathaway Stock

Last updated Apr. 4, 2025 by Charles Zemub

Investing in Berkshire Hathaway, the multinational conglomerate led by the legendary Warren Buffett, is a dream for many investors. Known for its value investing principles and a diverse portfolio of companies, Berkshire Hathaway has consistently delivered remarkable returns over the decades. However, acquiring its stock requires some understanding, given its unique structure and the considerable difference in share prices between its two classes of stocks. This article will guide you through the steps and considerations involved in buying Berkshire Hathaway stock.

Understanding Berkshire Hathaway

Before you invest in Berkshire Hathaway, it’s crucial to understand what the company is and how it operates. Founded in 1839 as a textile manufacturing company, it later transformed into an investment powerhouse under Warren Buffett’s leadership from 1965. Today, it owns a diverse range of subsidiary companies operating in various industries like insurance, utilities, railroads, and consumer goods. Some of the well-known subsidiaries include GEICO, Dairy Queen, and BNSF Railway.

Berkshire Hathaway is publicly traded under two ticker symbols: BRK.A and BRK.B. Class A (BRK.A) shares are considerably more expensive and come with more voting power, while Class B (BRK.B) shares are more affordable and accessible to the average investor.

Step-by-Step Guide to Buying Berkshire Hathaway Stock

Step 1: Choose Between Class A and Class B Shares

The first decision when buying Berkshire Hathaway stock is choosing between the Class A (BRK.A) and Class B (BRK.B) shares. The Class A shares typically trade in the hundreds of thousands of dollars, whereas Class B shares are priced more modestly, allowing investors with smaller budgets to own a piece of the company. While Class A shares have more voting power, both classes receive the same economic benefits.

Step 2: Select a Brokerage Platform

To purchase Berkshire Hathaway stock, you’ll need a brokerage account. Here are the steps to follow:

• Research Brokerages: Look for a brokerage that offers flexibility, low fees, and access to the New York Stock Exchange, where Berkshire Hathaway is listed.
• Online vs. Traditional Brokerages: Consider whether an online discount brokerage or a traditional firm with higher fees but personalized service suits your needs better.
• Open an Account: Fill out the necessary forms, verify your identity, and fund your account with the amount of capital that you plan to invest.

Step 3: Research and Analyze

Engaging in thorough research before making a purchase is essential. Here are some steps to guide your research:

• Understand Financials: Review Berkshire Hathaway’s latest earnings reports and annual letters to shareholders, usually released every February.
• Evaluate Market Conditions: Consider the broader market conditions and how they might affect Berkshire Hathaway’s operations, especially given its sizeable insurance division.
• Assess your Risk Tolerance: Ensure the investment aligns with your financial goals and risk appetite.

Step 4: Place Your Order

Once you have decided how much to invest:

• Choose the Order Type: Place a market order to buy shares at the current price or a limit order to set a specific price at which you’re willing to purchase.
• Monitor the Investment: After purchasing, keep track of the stock’s performance by following market updates and company news.

Step 5: Dividend Reinvestment Plan (DRIP)

Although Berkshire Hathaway does not traditionally pay dividends, investing in a DRIP with other stocks in your portfolio can be a wise strategy to compound your investment further.

Step 6: Long-term Holding

Berkshire Hathaway is generally considered a long-term investment. Maintaining a long-term perspective allows you to ride out market fluctuations and benefit from compounding growth.

Things to Consider Before Investing

The Warren Buffett Impact

Many investors are drawn to Berkshire Hathaway due to Warren Buffett’s reputation. However, it’s important to consider the future of the company post-Buffett. While the company plans for its eventual transition, the absence of Buffett might influence outsider confidence.

Diversification

Berkshire Hathaway itself is like a mutual fund due to its diverse holdings. However, it’s still wise to maintain a diverse portfolio beyond any single investment to manage risk better.

Economic Cycles

Berkshire Hathaway’s performance can be influenced by economic cycles due to its significant exposure to the insurance and utilities sectors. Understanding these dynamics can help in making informed investment decisions.

FAQs

1. What is the difference between BRK.A and BRK.B shares?

BRK.A shares are more expensive and offer more voting rights compared to the cheaper BRK.B shares, which were created to make the stock more accessible to average investors.

2. Does Berkshire Hathaway pay dividends?

No, Berkshire Hathaway does not pay dividends. The company reinvests profits into growth opportunities instead of distributing them as dividends.

3. Can the stock price of BRK.B grow like BRK.A?

While BRK.B is more affordable, it has the same potential for growth as BRK.A since they both share in the economic performance of the company.

4. Is Berkshire Hathaway a safe investment for beginners?

Berkshire Hathaway is typically considered a stable long-term investment, but beginners should assess their financial goals and risk tolerance before investing.

5. How do I sell Berkshire Hathaway stock if I need to?

Selling Berkshire Hathaway stock is straightforward. Log into your brokerage, choose the shares you want to sell, and determine whether you’re placing a market order or limit order.

Investing in Berkshire Hathaway is an alluring proposition for many, combining the wisdom of Warren Buffett with the robustness of a diversified portfolio. By understanding the steps and considerations involved in purchasing its stock, you can make informed decisions that align with your investment goals.