There’s an enormous financial secret hiding in plain view… and discovering it may change the way you invest for the rest of your life.

Most people think the root of “superinvestor” Warren Buffett’s success comes from his stakes in some of the largest, most powerful businesses on the planet.

If you’re one of these people… you’re wrong.

Yes, his holding company, Berkshire Hathaway, includes global brand names like Coca-Cola, See’s Candies, Dairy Queen, and Duracell. (These have driven up Berkshire’s stock price—for “Class A” shares—all the way to $213,440 per share.)

But at its core, Berkshire Hathaway is an insurance company.

According to Buffett’s 2015 letter to Berkshire shareholders, insurance is the largest single sector of revenue for the conglomerate ($5.2 billion of Berkshire’s $16.6 billion total operating income in 2014).

This isn’t an accident. “Boring” insurance happens to be the most powerful business enterprise ever created.

That’s because not every insurance policyholder makes claims at once. The majority never do. That allows insurers to generate enormous pools of “free” cash (from their clients’ premium payments). They call this money “the float.”

They use this constant cash stream to make investments… Buffett’s forte. Here’s what Buffett said about the importance of the float to Berkshire’s business structure:

Our float—money that doesn’t belong to us but that we can invest for Berkshire’s benefit—has grown from $41 billion to $84 billion.


Bottom line: Buffett’s legendary investments into “mega corporations” like Coke grab the limelight. But it’s his core insurance companies—and their $83 billion float—that give him a never-ending supply of “dry powder.” He uses it to pull off these headline-making deals on the best businesses on the planet.

  In today’s Daily, you’ll find lessons from two of PBRG’s premium services.

Each service approximates one-half of Buffett’s two-step method for generating an absolute fortune:

1) Generating enormous income—your own “float”—through providing a special type of insurance; and

2) Investing that income in the most dominant companies on the planet when they present good valuations.

(If you’re interested in learning how to apply the two-step “Buffett Method” for yourself, pay special attention to the grey box that follows below…)