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Warren Buffett'sBerkshire Hathaway(BRK.B - Get Report) tops off the list thanks to a $40.6 billion cash position and an absolutely massive $135.4 billion stock portfolio. The positioning gives the Oracle of Omaha plenty of dry powder to drop on the next Geico or NetJets (just two companies under the Berkshire umbrella). That provides a hefty margin of safety for investors in 2012.
Ultimately, it's probably most accurate to call Berkshire Hathaway an insurance company. While Berkshire's subsidiaries include everything from prefab housing manufacturers to candy companies, insurance and reinsurance make up the lion's share of BRK's performance. Despite the many pitfalls that insurers have faced in the last several years, Berkshire has managed to come out ahead, managing underwriting risks adequately and affording themselves a hefty profitability cushion. When interest rates start to come back around, the firm's ability to earn should increase materially.
The big unknown is Buffett. At 82 years old, the investor's days at the helm of his storied firm are clearly numbered. While he's been planning for that for some time, hiring new investment managers to run Berkshire's mammoth portfolio, for instance, it's not clear if any successors will have the same golden touch that Buffett's had.
Despite that, a huge cash position certainly helps to offset any risks that remain in this stock. After taking out any debt, cash and investments account for around half of Berkshire's market capitalization.
That's not a bad safety net at all.
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