Subject: Re: Concerned
I don't arrive at your conclusion starting from the same evidence you're looking at.

You mentioned the best allocation of late was Apple stock, an idea that came not from Warren, but from Todd. You're criticizing BNSF, and BHE, but those are Warren's ideas. It's true that in the current landscape, BNSF and BHE are not set up to make large volumes of revenue. One of the strengths of Berkshire vs a pure electric utility or railroad company is that they can take profits from BNSF and BHE and invest them in other ideas. The investment thesis with both these companies was Berkshire could reinvest large amounts of cash for guaranteed returns. BHE for example could finance overdue large-scale improvements in the electricity distribution in the western US, but the returns aren't there because of regulators. I take it as a sign of proper restraint that Abel has decided not to pursue those projects. And indeed Berkshire will be there waiting with massive financial backing when the country decides those investments are indeed needed. I'm OK with waiting until they're profitable.

In comparing BNSF to its peers, remember that Berkshire doesn't specialize in owning the best companies out there. Fruit of the Loom trails Hanes, Benjamin Moore trails Sherwin Williams, Dairy Queen trails most other food franchises. The purchase price matters, Berkshire was able to buy all of BNSF for a discounted price after the 2008 crash.

Two main strengths of Berkshire's insurance business are its unwillingness to write money-losing policies (underwriting prudence), and its ability to invest float through the head office - investing in other companies' growth projects, repurchasing stock, etc. When you see underwriting prudence at work, it looks just like what you described is happening at Geico, a reduction in advertising expenses, and a reduction in the number of employees.

One of Berkshire's biggest mistakes of omission is saying no thanks to a large early investment in Google. Buffet has written about this before, and this was despite Geico spending a large amount of money advertising on the platform. I see Berkshire's purchase of Apple - first by Todd, then by Buffett - as a sign that this won't happen again. So I believe it's reasonable to expect that Berkshire will be every bit as strong, with multiple people at the helm - Ted, Todd, Abel, Jain - as it has been in the past. And maybe stronger than it was when it decided to forgo the Google investment.