I have a some­what unique per­spec­tive on this be­cause I owned Berkshire in the late 1980s, and I own it today. I re­mem­ber what wait­ing felt like then. I bought a Berkshire A share for $6,950. The bid was $6,750——the ask $6,950. Berkshire traded over the counter, small vol­ume, enor­mous bid-ask spreads, and no Wall Street fol­low­ing. A very smart in­vestor looked at me and said some­thing I’ll never for­get: “John, you bought a col­lectible. You joined a club. But you don’t make money buy­ing one share of stock for seven thou­sand dol­lars. You never have.” In fact, there were plenty of rea­sons to won­der whether Berkshire was more a tro­phy than a real in­vest­ment. There were no buy­backs. No div­i­dend. No cov­er­age...and as a bro­ker told me, “It trades by ap­point­ment only.”
  And if the mar­ket de­cided Berkshire was worth 20% less or 40% less, there wasn’t any­thing un­der­neath the stock. It floun­dered for weeks. Today, I think wait­ing is the EASIEST part. Why? Today, roughly a bil­lion dol­lars of cash is gen­er­ated by the Berkshire ma­chine every week. Berkshire owns nearly three-quarters of a tril­lion dol­lars of pro­duc­tive as­sets. Those busi­nesses are work­ing every day while Berkshire waits for new op­por­tu­ni­ties.
  The cash isn’t sim­ply sit­ting in a vault, ei­ther. It earns a mean­ing­ful re­turn while Berkshire waits. And when the stock be­comes suf­fi­ciently at­trac­tive, there’s an­other op­tion that didn’t exist when I bought my share in the late 1980s: Berkshire can buy Berkshire. Berkshire re­pur­chased bil­lions of dol­lars of its own stock in the sec­ond quar­ter and then bought bil­lions more in July. That changes the psy­chol­ogy of wait­ing. And here’s the irony: Ev­ery­one com­plains Berkshire needs an­other ele­phant. I un­der­stand the ar­gu­ment. Berkshire is so large that a $5 bil­lion ac­qui­si­tion isn’t going to change the com­pany very much. But per­haps we’re fo­cus­ing too much on the size of the next trans­ac­tion and not enough on the size of the ma­chine that’s al­ready op­er­at­ing. BNSF is work­ing. And im­prov­ing. Berkshire Hath­away En­ergy is work­ing. And im­prov­ing. GEICO is work­ing. OK, yeah...not as well as re­cently, sure. The man­u­fac­tur­ing and ser­vice busi­nesses are work­ing. And im­prov­ing. The in­vest­ment port­fo­lio is work­ing. Ro­bust re­sults re­cently. The cash is earn­ing money. And every week, more cash ar­rives. The nee­dle IS mov­ing. It just isn’t mov­ing be­cause Greg Abel an­nounced a $100 bil­lion ac­qui­si­tion. He did not. It is mov­ing be­cause Berkshire it­self is an ex­tra­or­di­nary com­pound­ing ma­chine. And this brings me to an­other issue: how should we think about all that cash? I love read­ing and lis­ten­ing to Howard Marks. He often talks about “supposition” when think­ing about the fu­ture——not blind faith, but a ra­tio­nal as­sump­tion made in the face of un­cer­tainty. His dis­cus­sion of in­vest­ing dur­ing the 2008–09 cri­sis trig­gered this thought. Marks and his part­ners were scared. They didn’t know whether the fi­nan­cial sys­tem would sur­vive. But they knew they were find­ing ex­traor­di­nar­ily cheap as­sets.
  So they made a sup­po­si­tion: Let’s sup­pose the world doesn’t end. I think some­thing sim­i­lar ap­plies to Berkshire today. If Berkshire is earn­ing roughly 3.8–3.9% on its cash and Trea­sury port­fo­lio——roughly half of shareholders’ eq­uity——the ques­tion isn’t whether Berkshire can some­how turn $360 bil­lion into a spec­tac­u­lar re­turn. It’s whether Berkshire can even­tu­ally do mean­ing­fully bet­ter than 3.8–3.9%. I think that’s a pretty easy sup­po­si­tion to make. I don’t know where the hell Berkshire’s 6% in­vest­ments will come from. But I’m will­ing to make a ra­tio­nal sup­po­si­tion that, over a long enough pe­riod, some will. That’s a pretty low bar.
  The $360 bil­lion isn’t nec­es­sar­ily going to re­main $360 bil­lion earn­ing 3.8%. It is cap­i­tal wait­ing for its next use. Berkshire can buy busi­nesses. It can buy se­cu­ri­ties. It can wait for dis­lo­ca­tions. And all the while, the ex­ist­ing busi­nesses keep re­plen­ish­ing the cap­i­tal pool. I’m bet­ting half of Berkshire’s cap­i­tal isn’t earn­ing 3.8% five years from now. How? No idea. But I’m mak­ing that sup­po­si­tion. That was a pretty fright­en­ing sup­po­si­tion for Howard Marks. Mine feels a lot less fright­en­ing. We know what the cap­i­tal is earn­ing today. We don’t know what it will earn when Berkshire de­cides the time is right to put it to work. That un­cer­tainty is real. But un­cer­tainty isn’t the same thing as risk. Some­times it is sim­ply op­tion­al­ity. And Berkshire has an ex­tra­or­di­nary amount of it. Wait­ing is the eas­i­est part. It truly is.