Beyond Wall Street: Warren Buffett's Multidimensional Success Story — Private Jets, Insurance Brilliance And Candy

Warren Buffett, often touted as the Oracle of Omaha, is regarded as one of the most successful investors of all time and the sixth-richest man in the world, with a net worth of $121.1 billion, according to Forbes Real Time Billionaires list. 

While many people believe Buffett's net worth comes from his savvy investments, he owns several highly profitable businesses through his holding company Berkshire Hathaway Inc. 

"First, we invest in businesses that we control, usually buying 100% of each. Berkshire directs capital allocation at these subsidiaries and selects the CEOs who make day-by-day operating decisions," Buffett wrote in Berkshire Hathaway's 2022 shareholder letter. "In our second category of ownership, we buy publicly-traded stocks through which we passively own pieces of businesses."

Investing In Insurance 

Berkshire Hathaway owns various insurance companies, including Berkshire Hathaway GUARD Insurance Cos., Berkshire Hathaway Specialty Insurance, Gateway Underwriters Agency, GEICO, General Reinsurance Corp., MedPro Group, National Indemnity Co. and United States Liability Insurance Group.

Berkshire Hathaway generated $21.36 billion in revenue from insurance premiums in the third quarter ended Sept. 30, reflecting a nearly 14% rise year over year. In comparison, Buffett's total income from interest, dividends and other investment income amounted to $4.05 billion. 

Berkshire's operating earnings came in at $10.76 billion in the third quarter, up 40.6% from the same period the previous year. The earnings include profits generated from various wholly-owned businesses, including insurance, railroads and utilities. 

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GEICO Rebound 

Buffett has said that auto insurer GEICO is a "crown jewel" of Berkshire Hathaway's insurance business and is his "favorite child." But GEICO succumbed to competitor Progressive in 2022, which caused the company to report a pretax underwriting loss of $1.9 billion in the fiscal year. 

Buffett's favorite child has managed to deliver a stellar comeback, as GEICO reported a pretax underwriting profit of $1.05 billion in the last reported quarter, marking the strongest performance since the first quarter of 2021. 

Fluctuating Income From Investments 

Buffett's investments lost approximately $13 billion in value in the third quarter, primarily driven by the poor performance of shares of Apple Inc. AAPL. This resulted in Berkshire Hathaway reporting a loss per share of $5.88 on its class B stock.

Buffett has been vocal about the benefits of holding a stock for extended periods rather than panic selling in the event of a market downturn. Apple stock, which fluctuated momentarily last year amid a weak sales outlook, has risen by nearly 40% over the past year. 

Private Jets 

Buffett owns NetJets Inc., a corporate jet charter business that he acquired in 1998. The company was a financial bleeder, struggling significantly since the Great Recession of 2008. The company reported a net loss of $711 million during the recession. 

Buffett restructured NetJets and changed its management, appointing Adam Johnson, an aviation veteran, as CEO. Since then, the company has taken a 180-degree turn to become one of the world's largest private jet charter businesses. 

“Adam Johnson has performed; you can’t believe what he’s done with the business,” Buffett told Forbes in May. “It was a tough model for a long time, but [Johnson] has brought it where it is, and we should have a wonderful company forever.”

In May last year, NetJets signed a deal with Embraer to deliver 250 of its Praetor jets beginning in 2025 for over $5 billion. 

Buffett's Dream Business: Candy 

Buffett's diversified business ownership has catapulted his net worth higher over the years. He also owns See's Candies, which he regards as his "dream business." Since purchasing the business in 1972, See's Candies has delivered nearly 8,000% returns as of 2019. 

“We put $25 million into it, and it’s given us over $2 billion of pretax income, well over $2 billion,” Buffett said at Berkshire’s 2019 annual shareholder meeting.

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