Choosing Between BRK A and BRK B

Have you ever wondered why a single share of Berkshire Hathaway’s Class A stock costs more than a house? That staggering price tag isn’t an accident; it was a deliberate strategy by Warren Buffett. He wanted to attract serious, long-term partners, not short-term speculators, and believed a high stock price was the best filter. To maintain this, Buffett famously resisted doing a “stock split”—the common practice of slicing a company’s shares into smaller, cheaper pieces. For decades, if you wanted in, you had to pay the full price of admission.

Eventually, this high price created a new problem. Wall Street firms started buying BRK.A and selling small pieces to the public through “unit trusts” that came with high fees. In response, Warren Buffett created the Class B shares himself. This was his pro-investor move to offer an official, affordable way for people to invest directly with him, cutting out the costly middlemen. This historic decision provides a clear answer from Warren Buffett on the difference between Class A and Class B shares.

This origin story explains why the B-share wasn’t an afterthought; it was created as the accessible front door to the company. It represents Buffett’s solution for investing in Berkshire Hathaway with little money, ensuring anyone can become a partner without getting overcharged. For nearly everyone, the choice between the two is surprisingly simple.

Price vs. Economic Value: Are You Getting the Same “Bang for Your Buck”?

Seeing the massive price gap, it’s natural to wonder if the B-share is simply the “cheaper” or “smarter” deal. In investing, however, price and value aren’t always the same thing. The best way to think about BRK.A and BRK.B is not as two different products, but as two different sizes of the exact same item—like a gallon of milk versus a single pint.

When Berkshire Hathaway created the B-shares, they set a permanent rule: one B-share would always represent exactly 1/1,500th of the economic value of a single A-share. This means that any dividends, earnings, or assets associated with an A-share are precisely 1,500 times greater than those for a B-share. You can think of the A-share as a whole pizza and the B-share as one of 1,500 tiny, perfectly equal slices.

This relationship plays out directly in their prices. If an A-share is trading for $600,000, you should expect a B-share to be trading for right around $400 ($600,000 divided by 1,500). You aren’t getting a bargain with B-shares; you are simply buying a smaller piece at the correct proportional price. Your “bang for your buck” in terms of company ownership is identical.

Ultimately, whether you spend $600,000 on one A-share or on 1,500 B-shares, you own the exact same amount of Berkshire Hathaway’s business. Your financial stake is identical, and so is your claim on future profits. While your share of the profits is proportional, your say in company matters is a different story.

Voting Rights: The One Difference That Doesn’t Matter for 99.9% of Investors

Beyond your financial stake, owning a stock often grants you a say in the company’s future through voting rights. Think of it like being a citizen of a town; you get to vote on important issues, such as who joins the board of directors. This is where the most dramatic technical difference between Berkshire Hathaway’s A and B shares appears, but it’s also the one that has the least practical impact on your decision.

A single Class A share commands significant influence, carrying 10,000 times the voting power of a single Class B share. This was designed intentionally to keep control of the company in the hands of its most committed, long-term investors. On paper, it sounds like a massive disadvantage for B-share holders, raising the question of which stock offers a real voice.

For the vast majority of people, however, this difference is purely academic. Unless you plan on investing tens of millions of dollars, your voting power—whether through A-shares or B-shares—is too small to influence any corporate decision. It’s like owning a single grain of sand on a vast beach. The outcome of the company vote will be decided by major institutional owners and, of course, Warren Buffett himself. While your vote might not carry weight, the ease with which you can buy or sell your shares is a far more practical consideration.

Liquidity: Why It’s Easier to Sell a Toyota Than a Ferrari

One of the most practical differences for anyone considering which Berkshire Hathaway stock to buy is liquidity. In simple terms, liquidity is how quickly and easily you can buy or sell something without affecting its price. Think about selling a car. A used Toyota has millions of potential buyers, making it easy to sell quickly for a fair price. A rare Ferrari, however, has a tiny pool of potential buyers, making a quick sale much more difficult. The Toyota is highly liquid; the Ferrari is not.

When it comes to BRK.A vs BRK.B liquidity, the affordable Class B share is the Toyota. Its lower price means a massive number of investors can trade it every day, creating a bustling market. The Class A share, with its house-sized price tag, is the Ferrari. Far fewer people have the capital to buy or sell it, making the market for it much smaller and slower. This is a key reason why BRK.B is the most straightforward and affordable way for beginners to own a piece of Berkshire Hathaway.

This distinction directly impacts how you manage your money. Imagine you need to free up $1,000 for an unexpected expense. If you own B-shares, you can sell just two or three to get the cash you need. But if you own a single A-share, you can’t just sell a small corner of it. Your only choice is to sell the entire, six-figure asset. This all-or-nothing scenario highlights the superior flexibility of the B-shares.

Can You Swap Them? The One-Way Street of Convertibility

A logical question arises: can you swap one type of share for the other? The answer is yes, but it’s strictly a one-way street. An owner of a single BRK.A share can choose to convert it into 1,500 BRK.B shares at any time. The reverse, however, is impossible—you can never bundle together 1,500 B-shares and trade them back up for a prestigious A-share. Once you go from A to B, there’s no going back.

Think of it like breaking a $100 bill. You can easily exchange it for a stack of smaller bills at the bank, but you can’t trade a random stack of small bills back for the original hundred-dollar note you started with. This feature primarily helps large A-share investors manage their estates or make charitable gifts. It allows them to divide up their massive holdings into smaller, more manageable pieces without having to sell an entire six-figure asset all at once.

For the average person, this convertibility feature is interesting trivia, not a practical consideration. The ability to convert BRK.A to BRK.B is a specialized tool for multi-million dollar portfolios. For nearly everyone else, the practical benefits of BRK.B shares, like affordability and flexibility, make it the superior choice. This conversion rule shouldn’t factor into your decision at all.

The Final Verdict: Which Berkshire Stock Should You Actually Buy?

After exploring the history and mechanics of BRK.A and BRK.B, the decision comes down to a single, practical question: which stock is the right one for you? The answer isn’t buried in complex financial details; in fact, it’s refreshingly straightforward.

Both A-shares and B-shares make you an owner of the exact same company. Whether your ticket says BRK.A or BRK.B, you own a piece of the same portfolio of businesses, from GEICO to See’s Candies, all managed by the same legendary team. You aren’t choosing between a “good” and “bad” version of Berkshire; you’re just choosing the size of your slice.

With that in mind, the choice becomes remarkably clear. For over 99% of individual investors, the definitive answer is the Class B share (BRK.B). The debate boils down to three simple, practical factors:

• Affordability: You don’t need to be a millionaire. You can buy B-shares for the price of a nice dinner out, not a new home.
• Flexibility: It’s easy to buy or sell a few shares at a time. This allows you to invest according to your own budget and timeline.
• Identical Ownership: You are getting the same proportional economic interest in one of the world’s most successful companies.

Ultimately, choosing the B-share isn’t a compromise—it’s the logical, accessible choice. It provides the perfect solution for investing in Berkshire Hathaway with little money, giving you all the benefits of ownership without the impractical hurdle of a six-figure price tag.

Your First Step to Owning a Piece of Berkshire

The six-figure price tag on a BRK.A share no longer needs to be a mystery. The history, purpose, and practical differences between the two share classes are clear, as are the distinct roles each one plays in Warren Buffett’s legendary company.

The B-share is not a “lesser” option; it was created specifically for individual investors. It represents the smart, affordable way to own Berkshire Hathaway. Choosing BRK.B isn’t a compromise—it’s the purpose-built tool for participating in the company’s long-term growth without needing the fortune required for a single A-share.

With the A vs. B question solved, your next step is clear and simple. All that’s left is to open a brokerage account if you need one, determine how many BRK.B shares fit your personal investment plan, and take your seat as a part-owner, investing alongside one of history’s greatest.