as i understand it, much of what BRK (buffett's company) does in effect is insurance. for a while he was insuring super-cat (super-catastrophic) insurance, for hurricanes, etc., and may still be doing so.
he also owns some common stock of other companies, and owns a bunch of companies outright. and has made periodic ventures into silver, and other things.
i am sure he is shrewd, and can be cold-blooded. i don't think he could have gotten where he is without that attribute. but he's no mozilo (from countrywide), AFAIK. i.e., he doesn't operate by ripping people off.
http://www.reuters.com/article/idUSTRE69E4KN20101015what he is best known for, AFAIK, is buying companies with good management and good prospects, whole. i understand he usually leaves that management in place to do its job, as that's part of the reason he buys the company. he wants to acquire well-managed, profitable businesses--which can survive and succeed over the long term.
in the video below, he mentions that his tax rate is lower than his receptionist. his total taxes (payroll plus income taxes) were 17.7%, while the average for his office was 32.9%. he had no tax planning, or shelters, no tax accountant, etc.
"just followed what congress told him to do...".
he says most of his income is taxed at 15%. and it takes a billion three to be on the forbes 400 as he is. "i'll bet a million dollars against any member of the forbes 400... that the average for the forbes 400 will be less than the average for their receptionists...the million will go to which ever charity the winner...designates."
asked about how his compatriots feel: "they are happy...they are not paying the tax rate their receptionists are."
lots of hedge fund managers get taxed at 15%, as it's based on capital gains. some of these guys make absolutely huge amounts.
http://www.bing.com/videos/watch/video/ ... FORM=LKVR4full disclosure: i do at present, own a small amount of BRK.B stock.
i do so for several reasons: i think he's very smart and capable. the stock is diversified more than a single company stock (BRK is a holding company). i have some faith that he treats the companies he buys well (leaves capable management in charge, and lets them run their business). and finally, i like the kinds of positions he takes in the above video, and the fact that he seems to me one of the more honest and sane mega-capitalists around. he warned years ago in his annual reports, about the "financial weapons of mass destruction" i.e., derivatives. he's a smart man.
i in no way mean anything i say as a sales pitch, nor do i mean to idealize him. just provide a little context. my statements are in no way a recommendation for the stock.
those interested more in tax structure could look up: "regressive" and "progressive" tax structures. very interesting for those who care about the re-distribution of wealth, through taxation.
my hunch is that teazer could talk about these things intelligently. and indeed, there may be others on the board who know more about buffett, and these issues than i do.
best...