No. of Recommendations: 0
I recall at one of the annual meetings, a question was posed as to why the cash and float are not just invested in an S&P index fund. After all, this is what Buffett has recommended that others do. Warren gave an answer that I found somewhat unsatisfying- that brk is too large to do so and would cause a disruptive swing in the market.
I don't remember that, but the S&P500 has a market cap of about $66,000 billion. Berkshire's cash pile is about 0.5%.
Perhaps the context was holding the S&P500 while waiting for an elephant? In that case, moving out quickly to buy the elephant would disrupt the market.
Maybe something to think about in the future rather than trying to pick individual stocks. Then focusing more resources on maximizing profits in wholly owned subsidiaries.
I agree. Or come up with their own large-cap quant fund. Jim wrote recently that we should not expect Berkshire's portfolio to outperform. I agree with that, too.
