Editing Conglomerate (company) (section)

===Advantages===
*Diversification results in a reduction of investment risk. A downturn suffered by one subsidiary, for instance, can be counterbalanced by stability, or even expansion, in another division. For example, if Berkshire Hathaway's construction materials business has a good year, the profit might be offset by a bad year in its insurance business. This advantage is enhanced by the fact that the business cycle affects industries in different ways. 
*A conglomerate creates an internal [[capital market]] if the external one is not developed enough. Through the internal market, different parts of the conglomerate allocate capital more effectively.
*A conglomerate can show earnings growth, by acquiring companies whose shares are more discounted than its own. In fact, [[Teledyne]], [[General Electric|GE]], and [[Berkshire Hathaway]] have delivered high earnings growth for a time.<ref>{{cite web |url=http://www.investopedia.com/articles/basics/06/conglomerates.asp |title=Conglomerates: Cash Cows or Corporate Chaos? |access-date=2009-05-28 |url-status=live |archive-url=https://web.archive.org/web/20090413022751/http://www.investopedia.com/articles/basics/06/conglomerates.asp |archive-date=2009-04-13 }}</ref>