Major ClientsWide moat

Berkshire has no customers in the ordinary sense, because Berkshire does not sell anything. Its subsidiaries do — insurance, rail freight, electricity, bricks, furniture, ice cream — to customer bases that share nothing at all. What the parent company has instead are four groups of counterparties, each in a relationship that would look strange at any other company.

The most important are the families who sell it their businesses. Berkshire's growth depends on private owners choosing it over a higher bidder, which is a customer relationship in reverse: the seller is choosing the buyer, and the product Berkshire offers is what happens after the sale. The second are policyholders, who hand Berkshire money years before it is paid out and thereby fund $177.5 billion of investable float¹ — customers who pay for the privilege of lending.

The third group is captive by regulation rather than by choice: the shippers who must move freight by rail and the households served by Berkshire Hathaway Energy's utilities, both operating in markets where prices are set by regulators rather than negotiated. And the fourth are the shareholders, who are unusual among public-company owners in receiving no dividend at all — they are paid in retained earnings and asked to trust the reinvestment.

The number that ties them together is operating earnings, roughly $47 billion a year. Every one of these relationships exists to feed that figure, and it is the only measure by which the whole arrangement can be judged.