Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTReuben Gregg Brewer, The Motley FoolSun, July 5, 2026 at 1:35 AM GMT+2 3 min readWhen you step back and look at the big picture, Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) is an industrial conglomerate. It has investments in hundreds of companies, including those it owns outright and public companies in which it holds stock, like Coca-Cola (NYSE: KO) and American Express (NYSE: AXP). In fact, many on Wall Street watch the company's investment decisions to glean ideas.But when you dig into Berkshire Hathaway's story, you'll find that it is a financial stock. And that's because the company is built on top of its insurance operations. Here's why that's so important.Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »Image source: The Motley Fool.Berkshire Hathaway loves the floatBerkshire Hathaway exists in its current form because of Warren Buffett. The now-retired former CEO's investment skills were so impressive that he earned the nickname the Oracle of Omaha. While he was definitely a great investor, his most impressive realization was probably that he could invest the float from insurance companies. The float arises because insurance companies collect premiums up front and pay out on claims in the future. In between, insurance companies can invest that cash. Most insurance companies focus on bonds, but Buffett chose to be more aggressive.Other companies have recognized the strength of this model, including Markel (NYSE: MKL) and Brookfield Corporation (NYSE: BN). Each is attempting to mimic the success of Buffett and Berkshire Hathaway. That said, there's more to Berkshire Hathaway's magic than just being an investment-led insurance business.Berkshire Hathaway is focused on making the right investment decisionsHaving a leading insurance operation, including industry giants like GEICO and General Re, is the foundational story. This is why the company is classified as a financial stock, even though it owns a widely diversified portfolio of businesses. However,