Berkshire Hathaway originally operated in textile manufacturing.
The company was formed in 1955 through the merger of Berkshire Fine Spinning Associates and Hathaway Manufacturing Company, two New England textile businesses. Its mills produced cotton textiles, including fabrics used in clothing and household goods.
Warren Buffett began buying Berkshire Hathaway stock in 1962 after noticing that the company was closing mills and repurchasing shares. He eventually took control, but the textile business continued to struggle. Buffett later shifted Berkshire toward insurance and other operating businesses, transforming it into a diversified holding company.
A common mix-up is assuming Berkshire began as an insurance company. Insurance became its most important foundation only after Buffett acquired National Indemnity in 1967. Berkshire's modern portfolio includes insurance, railroads, utilities, manufacturing and consumer brands, a dramatic change from its textile origins.