Investment Insights: BRK.A and BRK.B
Ever scrolled through stock prices and stopped dead, thinking you’d found a typo? For a single share of Berkshire Hathaway’s “A” stock (BRK.A), you could buy a nice house in many parts of the country. This isn’t an accident or a glitch; it’s the result of a deliberate investment strategy designed by the legendary Warren Buffett himself.
The answer lies in who Buffett wanted as his investors. From the beginning, his goal was to attract long-term “partners” who believed in the company, not short-term traders looking for a quick profit. Think of it like selling a priceless classic car: you want a dedicated owner who will cherish it for years, not someone who will flip it the next week. A high share price, in Buffett’s view, acted as a natural filter for serious, committed investors.
To achieve this, he famously refused to do something most other giant companies do: split the stock. A stock split is like cutting a whole pizza into more slices. The company’s total value doesn’t change, but each individual share becomes cheaper. Companies like Apple and Amazon have done this repeatedly to keep their shares accessible. By avoiding this, the price of a single BRK.A share just kept climbing for decades.
This intentional decision is precisely why BRK.A stock is so expensive. It’s a feature, not a bug. But as the price tag grew from thousands to hundreds of thousands, it created a huge barrier for everyday people. This eventually led to a clever solution and the creation of a second type of stock, starting the famous BRK.B stock split history.
Meet BRK.B: Your Affordable “Slice” of the Berkshire Pizza
With the A-share price soaring out of reach for most, a problem emerged. Investment firms began buying up the pricey A-shares and repackaging them into smaller, more affordable “units” for the public—often with hefty fees attached. Warren Buffett, known for his focus on shareholder value, saw this as a poor deal for everyday investors and decided to offer a better solution.
His answer came in 1996 with the creation of a second type of stock: the Class B shares, often nicknamed “Baby Bs.” This move allowed anyone who wanted to invest alongside Buffett to buy directly into Berkshire Hathaway, cutting out the expensive middlemen. It was a direct-to-consumer solution for the stock market, designed to make ownership accessible.
The easiest way to think about the difference is to picture a pizza. The original Class A share (BRK.A) is like the entire, uncut pie—big, valuable, and hard for one person to buy. The Class B share (BRK.B) is like an affordable, individual slice of that very same pizza. You’re still getting a piece of the exact same company, just in a size that’s easier to handle.
Ultimately, the creation of BRK.B transformed Berkshire Hathaway from an exclusive club into an investment accessible to almost anyone. While the price difference is the most obvious distinction, there’s a little more to the story of how these two share classes relate.
A vs. B: What’s the Real Difference Besides the Price?
Beyond the jaw-dropping price tag, the difference between BRK.A and BRK.B stock boils down to two key things: their economic value and their voting power. For nearly all investors, only one of these truly matters.
First, let’s look at the economics. The relationship between the two share classes is mathematically fixed. One Class A share is always worth exactly 1,500 Class B shares. Think of it like a currency exchange with a locked-in rate. An owner of a single A-share can, at any time, convert it into 1,500 B-shares. This ensures that a B-share always represents 1/1500th of the economic value of an A-share.
The second key difference is voting power. Owning a stock gives you a say in big company decisions, and BRK.A shares carry significantly more voting power than the B-shares. This was designed to keep the voting control of the company consolidated with Warren Buffett and other long-term, major shareholders.
So, should this difference in voting rights matter to you? For the vast majority of people, the answer is no. Unless you’re planning to buy enough stock to influence the board of directors, the voting power is largely symbolic. Both the A and B shares give you an ownership stake in the same fantastic collection of businesses. The B-shares simply make that ownership accessible.
What Do You Actually Own? A Look Inside Berkshire’s “Shopping Cart”
So, when you buy a share of Berkshire Hathaway, what are you getting? Unlike a company that makes just one thing, like a car or a smartphone, Berkshire is a special type of company called a holding company. The easiest way to think about it is as a giant, carefully managed shopping cart filled with dozens of different, successful businesses.
Inside that cart, you’ll find companies you definitely know and probably use. There’s the car insurance you get from GEICO, the Duracell batteries that power your remote, and the sweet treat of a Dairy Queen Blizzard. It also owns an entire railway (BNSF), See’s Candies, and big chunks of other famous companies like Apple and Coca-Cola. When you own a share of Berkshire, you own a small slice of every single one of these businesses.
This unique structure is a core part of Warren Buffett’s investment strategy. Instead of betting on a single industry, Berkshire owns a wide variety of strong companies that operate in different parts of the economy, from insurance and energy to retail and transportation. This provides a powerful, built-in benefit for investors called diversification. If one sector has a tough year, the others can help balance things out.
Ultimately, buying a share of Berkshire is less like buying a typical stock and more like buying a pre-packaged portfolio of American industry. You’re entrusting your money to a team that has spent decades picking what they believe are high-quality businesses. This unique structure raises a key question for investors: how does a pre-packaged portfolio like Berkshire fit into a long-term financial plan?
Is Berkshire a “Forever” Stock? The Pros and Cons for Long-Term Investors
Given that Berkshire is like buying a pre-packaged collection of American businesses, many people wonder if it is a good long-term investment. While no investment is a sure thing, thinking about it through a simple pros-and-cons lens can help you decide if it aligns with your goals.
For many, the appeal is clear. But like any investment, there are trade-offs to consider.
| Investing in Berkshire: Pros | Investing in Berkshire: Cons | | — | — | | Instant Diversification | The “Law of Large Numbers” (It’s harder to grow fast when you’re huge) | | Management by proven experts | “Key Person” Risk (What happens after Buffett?) | | A company philosophy focused on true, long-term value | You can’t pick and choose (You get all the companies, not just your favorites) |
The biggest challenge for Berkshire is its own massive size. Think of it this way: it’s much easier for a small speedboat to double its speed than it is for a giant cruise ship. Because Berkshire is already one of the largest companies in the world, its days of explosive, rapid growth are likely in the past. The goal now is more about steady, stable progress.
Furthermore, there’s the undeniable “key person” risk. For decades, the company’s success has been tied to two geniuses: Warren Buffett and his late partner, Charlie Munger. While a succession plan is in place, the question of whether the next generation of leaders can replicate their legendary performance remains a primary concern for investors.
How You Can Buy a “Slice” of Berkshire in Under 10 Minutes
If you’ve decided that Berkshire Hathaway fits your long-term vision, how do you actually buy it? Getting started is far less intimidating than you might imagine. The first step for buying any stock is to have a brokerage account. Think of a brokerage as a specialized online account, offered by firms like Fidelity, Charles Schwab, or Vanguard, that acts as your gateway to the stock market. Setting one up is usually a quick, online process.
Once you have an account, finding the right stock is like using a search bar. Every publicly traded company has a unique abbreviation, called a stock ticker symbol, that acts as its nickname on the market. For Berkshire Hathaway’s more affordable Class B stock, the symbol you’ll look for is simply BRK.B. This is the key that unlocks the ability for everyday investors to buy a piece of Warren Buffett’s company.
The great news is that buying these B-shares doesn’t require a fortune. While you can’t realistically buy a fraction of the house-priced BRK.A stock, the B-shares were created specifically for accessibility. Even better, many modern brokerages now allow you to buy fractional shares of BRK.B. This means if a single share costs, say, $400, you could invest just $50 to own a small piece of that share, making it possible to start with whatever amount you’re comfortable with.
Opening an account, searching for BRK.B, and deciding how much you want to invest is a standard procedure available to anyone. These simple steps can turn investment insights into a real, actionable possibility for your portfolio.
Key Takeaways on Buffett’s Empire
The seemingly impossible price of a BRK.A share is not a glitch but a deliberate feature, designed by Warren Buffett to attract long-term partners over short-term traders. His famous “no-split” philosophy preserved the exclusivity of Class A shares, cementing their legendary status.
To solve the accessibility problem this created, Berkshire Hathaway introduced its Class B shares. These “Baby Bs” offer a slice of the same company, making it possible for nearly anyone to invest alongside Buffett without needing hundreds of thousands of dollars. This dual-class structure offers identical economic ownership in different-sized packages.
Ultimately, investing in Berkshire is about more than just a stock ticker; it’s an investment in a philosophy. You gain a stake in a diversified “shopping cart” of leading American companies, from GEICO and Duracell to BNSF Railway. This provides built-in diversification, managed by a team with a decades-long track record. Whether it’s the right “forever stock” for you depends on your goals, but understanding its unique structure is the first step in making an informed decision.
