Subject: Re: The Magic Of Berkshire...
I've always felt the real magic of Berkshire is the wonderful combination of Index-like returns and Fort Knox type safety!
Where else can you hope to match the returns of the S&P500 and sleep like a baby every night...

Pity that we don't have polls. I'd bet that many if not most here see it likewise, that this is the single largest reason to own Berkshire.

This point goes in the direction of a very interesting recent discussion on the Mechanical Investing board: "What constitutes success?". Most if not all there agreed for them it's NOT (or not only) about beating the Index, but to avoid large drawdowns, to have a smoother ride, with events like the Grand Financial Crisis having less catastrophic effects on their portfolios.

In the case of Berkshire I think this "having a smoother ride in case of catastrophic events" can be extended beyond the raw numbers, beyond the comparison "How much did BRK vs. S&P gain/lose the last X years?": Berkshire is not and arguably never was so overvalued as the S&P currently is. This means even if there is a dramatic crash tomorrow, bringing down the index to it's historical levels, then even if it drags Berkshire the same % down, I will still sleep better owning Berkshire than S&P, as I am far more convinced about it's stock price recovering during my lifetime (or quicker :) from its normal valuation than the S&P from it's not normal valuation.


It appears that Mr. Buffett does care about the size of his canvas and is averse to shrinking it....... This view receives support in the fact that he resisted buying back Berkshire stock for a long, long time, despite repeated calls for it........ I recall being puzzled by his behavior, given that he was a huge proponent of buying back stock when it trades below intrinsic value......
most of Berkshire shareholders are nameless and faceless to him.

Why not simply believing what he stated very clearly numerous times, that he sees them as his partners and has an aversion to buy back shares from his partners when they are cheap as he feels this is to take advantage of his partners? I fully understand this and fully believe that he means what he says - and this in the world of big business so unique attitude actually is one of the reasons for me to own Berkshire shares, feeling honored and grateful to be called "partner" by this very special man.