No. of Recommendations: 20
Some parts HAVE ALWAYS BEEN and will ALWAYS be..less than stellar, yes.
In fact, I would argue there are far fewer less than stellar investments today than in Warrens heyday. Warren admits he owned all sorts of really bad investments in his younger days—that only worked out because he bought them Ben Graham cheap and got out before they went sour or out of business.
My take is Berkshire has now and has always made lots of mistakes. Nothing new here… it’s part of the deal…it’s reality. Buffett’s most egregious mistakes this century have not been wipeouts (that’s KEY) and they generally pay cash to headquarters regularly along the way. Some of his worst large mistakes were essentially sideways investments when you look at purchase/sale and cash returned.
Obviously, as an example, Kraft yes was a real mistake. But what do our “losers” look like? This is typical: Kraft safely pays out a fat quarterly dividend, has returned a boat load of cash to hdqtrs. It’s a loser but ultimately I don’t think will be an unmitigated disaster. The goal is ZERO disasters.
Truth is..
One Apple a day keeps the doctor away.
One Apple a decade generally takes care of performance worries.
One Apple a decade takes care of a dozen processed foods mediocrities lol.
Berkshire’s record on its rare “all-in” has always powered its overall performance. Obviously there will be issues, sometimes major ones, with subsidiaries. But look at the purchase price—and gain of Burlington Northern bought on the cheap, of GEICO since the 49% share became full ownership, of the furniture group, of the utilities/energy segment…we could go on. The losers, meanwhile at least keep churning out cash… $1 Billion+ a week compounds nicely …with a risk/reward capital profile that’s the envy of the world.
And don’t forget—Berkshire owns the safest mega cap in world history, safer than Berkshire itself: the 26th largest “company” in the US: it’s cash and cash equivalents.
But sure…it’s not perfect.
Something to ponder as investors ask —where the heck are the $Trillions in AI spending taking those companies? Anyone have any idea?
CEOs “no, not really ..but this is a race we can’t afford to lose”.
And you’re worried about OUR capital spends? :)
