Jim, we all know that the majority of the cash in the stock portfolio are held in companies that fall in the "forever" category. What allocation are we saying then ? Even Warren had trouble in capital allocation the last 10-15 years with overpaying(PCP, Pilot,KHC) even though they are turning out okay now. The good news is Greg is righting the ship on the operational side now.

In terms of capital allocation, it's a game of statistics. You can't look at one item or a short time period. Overall Mr Buffett's record in recent years is spectacular, at least on the investments side. That's largely thanks to Apple, it's true, but that can't be treated as an outlier as it's an integral part of the overall record. (Einstein's career was terrible except for those two lucky papers about relativity, right?) After a number of years, with the entire mix of hits and misses in capital allocation, the record is still outstanding on the investment side. You can only judge based on that level of breadth, both in time and in transactions.

The exception is the operating companies. How does that look from the point of view of the full set of units over a long period of time? In short, PP&E is up over a third in six years, and earnings haven't budged. There haven't been any gigantic acquisitions, so a huge whack of this comes down to looking at the incremental capital allocated within the businesses--smaller acquisitions and expansion capex--and sweating the existing companies by running them better. In short, neither has helped a whit. Some of that was Mr Abel's job.

Like most folks here I have reasonable confidence in the new boss, but it's in the "benefit of the doubt" category, as those numbers--WITH consideration of a very broad swath of units over a long period of time--do not currently show evidence of "righting the ship on the operational side". At least not if you mean that in the sense of making more money.

Now, there are mitigating circumstances to be sure. If people don't ship as much coal, you won't make as much money carrying it around for them. Even if Mr Abel was running those operating units, capital allocation was Mr Buffett's job, not his. And so on. I'm just pointing out that the glowing narrative of Mr Abel's skills is not particularly well supported by the financial results, neither in capex nous nor operational effectiveness.

For a really bullish case, look at the longer run median-year pre-tax operating income in each of rails, utilities, and MS&R prior to the last few years. Then look at current year revenues, and estimate how amazingly valuable those operations would be if results *were* to return to the prior level of profitability. Maybe a share is worth a lot more than I'm giving it credit for. But on the other hand maybe that level of profitability won't ever return.

Jim