Subject: Re: Second quarter comments
Thanks for the excellent analysis Jim.

Given the continuing evidence of significantly reduced value growth, suggesting an inability to raise prices to keep up with inflation and that the pricing power we all assumed to be present in Berkshire's core businesses may not be there, do you anticipate significantly changing (reducing) your portfolio's Berkshire allocation as a result?

Or do you intend to wait and continue monitoring performance over the next year to gauge if this is a temporary blip (or perhaps a lag effect at play with the price increases)?

I also wonder if we'd expect value growth to pick up again if inflation continues to subside. It seems non-intuitive to me, but could there be a factor at play with the business that significantly boosts Berkshire's earnings ability in low inflation environments but decimates it in moderate to high inflation environment like that which we've been in?

I would have thought that a lack of pricing power (if that's the issue at play here) would be pretty damning for future value growth prospects even in a low inflation environment.