Motley Fool Money Price Matters
Mar 21, 2022
This week, Jason Moser, a Senior Analyst at Motley Fool, dives into Berkshire Hathaway's blockbuster $11.6 billion acquisition of Alleghany Insurance, unpacking Warren Buffett's strategic investment philosophy and the prospect of future acquisitions. Meanwhile, Arnold Donald, CEO of Carnival Cruise Line, shares how the company is innovating in a post-pandemic world with eco-friendly ships and enhancements designed for guest experiences, highlighting the exciting future of cruising as consumer engagement rebounds.
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Berkshire's Alleghany Acquisition
- Warren Buffett's Berkshire Hathaway acquired Alleghany, an insurer similar to Markel, for $11.5 billion.
- Alleghany, known for conservative management, has trailed the market, unlike Markel's higher growth.
Berkshire's Increased Insurance Exposure
- Berkshire Hathaway's acquisition of Alleghany increases its insurance exposure, but this shouldn't overly concern investors.
- Alleghany's conservative approach aligns with Berkshire's style, and insurance contributes only 20% of Berkshire's operating earnings.
Price Matters in Investing
- Investors should learn from Buffett's patience and focus on price, exemplified in the Alleghany acquisition at 1.3 times book value.
- Price matters, especially in volatile markets, offering long-term rewards for patient investors.