Warren Buffett becomes owner of Berkshire Hathaway in May of 1970...Warren owned 29% of Berkshire's stock and he votes himself in as chairman of the Board of the company...He will receive a $50,000 annual salary...
Warren would write the 1970 annual letter to shareholders for Berkshire...Ken Chace had done it the last few years...The Berkshire annual letters and future letters would become a must read for many investors...
The three main business lines of Berkshire Hathaway are textile, banking, and insurance...The businesses were purchased by Warren through Berkshire Hathaway earlier...
The textile division is ran by Ken Chace and is a tough business because the textile business is moving overseas...In 1970 the textile business sales are down dramatically...Ken Chace is doing all he can to squeeze out profits in the business...The profits for the textile division of Berkshire is $45,000...Ken Chace's salary is $42,000...
The banking business is mainly the Illinois National Bank...From an earnings standpoint, the banking division is the largest division...The bank makes record profits in 1970 of $26 million...The bank is ran by Gene Abegg and Bob Kline...
The insurance division is ran by Jack Ringwalt...The division profits come from National Indemnity...The insurance mainly from National Indemnity earned $2.1 million...The company started Cornhusker Casualty...The insurance operations deteriorated somewhat in 1970 from 1969 from an underwriting standpoint, but the insurance portfolio had excellent results...
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