I tend to agree that Berkshire has run into some headwinds. The over picked assets and size issue is preventing new oaks with good prospects from making up for older trees that have matured. That is a fundamental problem because Berkshire buys for life and no tree grows to the sky.

I feel a little sorry for Buffett. He did these mostly incredible deals a long time ago now. BNSF and BHE. They have worked out brilliantly if looked at over their time in Berkshire. It’s obviously a rare business that can keep growing earnings indefinitely. And it’s even more unusual to achieve continuous growth if you are buying giant mature businesses. Would be unfair to paint Buffett as having lost his touch and no one is saying that.

The investment mistakes in recent years are a reflection of just how hard it has become.

The climate change problem and the political tectonic plates shifting are concerning. BHE was up until a year or two ago, an important opportunity for Berkshire to deploy large amounts of capital. That growth opportunity, made it a valuable business and a significant part of Berkshire’s intrinsic value. That value appears now to have be impaired and that is an issue when the share price is riding high.

However, Berkshire is not returning the cash. Presumably because they remain optimistic that opportunities will come along again.

I would have expected the share price to have declined a little more than it has. But maybe that takes time. That in itself would of course open the buy back door.

BHE events are disappointing. Not Buffett’s mistake in my opinion.

Still holding a large percentage of my portfolio in Berkshire but nothing like the 90% allocation from 2020 when it was 1x book and things were not so difficult. The world keeps on changing and the next crash is never far away…