Subject: Re: Expected value
With those assumptions (which you can change at will), Berkshire would be better off sitting on zero-real-return cash for up to 7 years before buying stuff offering 8%, than to buy the average large US firm now at today's general valuation levels. If they had to wait for 8 years before getting the buying opportunity, the ten year return would be 0.7%/year worse than buying average stuff at current valuation levels today.
Berkshire's cash levels net of float have been above normal-ish for only a couple of years, so settle in...
(Cash + Fixed - Float)/Assets
2000 7%
2010 1%
2011 -1%
2012 0%
2013 -1%
2014 0%
2015 0%
2016 0%
2017 1%
2018 1%
2019 2%
2020 2%
2021 1%
2022 -1%
2023 2%
2024 14%
2025-3 16%