Berkshire Hathaway Inc (BRK.A)

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In 1962, Warren Buffett began buying stock in Berkshire Hathaway after noticing it was statistically undervalued. Buffett bought the stock with the idea that as Berkshire closed textile mills and freed capital, there would be a tender offer at some point and they could sell the stock for a profit. Eventually, Buffett acknowledged that the textile business was waning and the company's financial situation was not going to improve. In 1964, Stanton made an oral tender offer to buy back Buffett's stake in the company for $111/2 per share. Buffett agreed to the deal. A few weeks later, Warren Buffett received the tender offer in writing, but the tender offer was for only $113/8. Buffett later admitted that this lower, undercutting offer made him angry.[16] Instead of selling at the slightly lower price, Buffett decided to buy more of the stock to take control of the company and fire Stanton (which he did). However, this made Buffett the majority owner of a failing textile business.

Buffett initially maintained Berkshire's core business of textiles, but by 1967, he was expanding into the insurance industry and other investments. Berkshire first ventured into the insurance business with the purchase of National Indemnity Company. In the late 1970s, Berkshire acquired an equity stake in the Government Employees Insurance Company (GEICO), which forms the core of its insurance operations today (and is a major source of capital for Berkshire Hathaway's other investments). In 1985, the last textile operations (Hathaway's historic core) were shut down.[17]

Buffett has described purchasing Berkshire Hathaway as the biggest investment mistake he had ever made, denying him compounded investment returns of about $200 billion over the subsequent 45 years.[16] He has estimated that had he invested the same money directly in insurance businesses instead of buying out Berkshire Hathaway (due to what he perceived as a slight by an individual), it would have paid off several hundredfold