Pivot

By: admin | Date: November 5, 2015 | Categories: encouragement

I was curious. Where did Warren Buffet’s investment firm, Berkshire Hathaway come from. My hunch was it was a made-up name. The name sounds prestigious – better than Buffett of Omaha, Inc. So, I looked it up.

What is Berkshire Hathaway?

The famous Berkshire Hathaway is Warren Buffett’s company. The company is run as a conglomerate and manages a portfolio of company holdings. In addition to its stock holdings, the company owns stakes in several private companies including Heinz and Dairy Queen.

Berkshire Hathaway’s History

Warren Buffett image

In 1888, The Hathaway Manufacturing Company was founded by China trader Horatio Hathaway as a cotton milling company. In the 1950s, The Hathaway Manufacturing Company merged with Berkshire Fine Spinning Associates Inc.

Berkshire Fine Spinning Associates was a milling company that was established in 1889 in Adams, MA. By 1917, the company was one of the largest cotton companies in the world.The combined company owned 15 plants and employed 12,000 people.

Warren Buffett began to purchase shares of the company in 1962, believing that the company’s stock price was undervalued at under $8 per share. By 1963, Buffett and his associates were the largest shareholder of the company. Eventually, Buffett used his stake to take control of the company. By 1979, the stock was worth $290 per share, lifting Buffett’s personal worth to $140 million.

Following the management change, Buffett decided to maintain textiles as the company’s core business, but also used the company as an investment vehicle. As plants began to close and the demand for textiles declined, the core business was changed to insurance services in 1967. Some of the company’s first insurance acquisitions included National Indemnity Company and National Fire & Marine Insurance Company. By 1968, the company continues to diversify by acquiring newspapers including Sun Newspaper.

Here’s the point

Nobody is buying cotton mills today. Not in the U.S. Had Buffett hung on to cotton milling alone, he would have ridden is amazing $140 million into the ground. Today, their biggest investments (stock) are Wells Fargo Bank, Coca-Cola, American Express, IBM and a bunch of other companies.

To succeed in business, you have to pivot, shifting from what worked in the past to what is working now and likely to work in the future. Though it looks like Buffett is only interested in major blue chip companies now, he is still looking for stock bargains – companies with low priced stock compared to their earnings (P/E ratio).

Churches complain (I heard it yesterday) that people just aren’t interested in coming to our churches nowadays. It’s partly true. I’ve certainly seen that you can’t just start a Sunday worship service, put out a sign and expect people to flock to church. Wherever I go, I have no trouble interesting people in my carpet cleaning services. But, my church? I’m not running out of Vine business cards.

But, people are interested in Jesus and in what Jesus can bring to their lives. They’re not looking for that in churches. So, where are they looking? Where are they open? Should we continue planting small churches that remain small and celebrate that? Or should we switch from cotton mils to something new, quiet, under-valued – that works!

Here are a few ideas – how to add spiritual value

  • Hold a Website Workshop (Lori, Kent both need that now) Ask Brian for help
    • Initial Questions and Decisions – counting the cost
    • Google – organic search (SEO)
    • Google Adwords
    • Reviews/Yelp
    • Social Media – Email, etc.
  • DivorceCare or Holidays (for DC alums and friends) NOW
  • Discipleship/Small Groups/Mentoring
  • Support Group for small business owners