ibb.co: BRK B 30Y Rolling Returns vs SP500 AAPL hosted at ImgBB

One thing that strikes me from the chart is that even Buffett's extraordinary ability to outperform became progressively harder to express as Berkshire grew. Over the most recent 30-year window, Berkshire's annualized return was 11.1% versus 10.35% for the S&P 500—a very different margin from earlier decades.

That makes me cautious about the argument that a more aggressive Greg Abel can somehow restore the Berkshire of old simply by putting more cash to work. Activity is not the same as successful capital allocation. Buffett wasn't sitting on hundreds of billions because he forgot that invested money earns more than idle money. Presumably, he couldn't find enough opportunities large enough and attractive enough to meet his standards.

So if Abel sees substantially more opportunities, I think the important question is why. Has Berkshire genuinely expanded its circle of competence? Does Abel have a differentiated investment insight that Buffett lacked? Or has the threshold for what qualifies as an attractive investment changed?

Abel has an excellent reputation as an operator. But running businesses well and allocating hundreds of billions of dollars at superior rates of return are not quite the same skill. I have not yet seen a comparable long-term public record that demonstrates that kind of capital-allocation edge. Perhaps it will emerge—but Buffett's record cannot simply be inherited by his successor.

I am not bearish on Berkshire. The post-Buffett Berkshire may work well. I just think the burden of proof has shifted. At Berkshire's enormous size, the job is arguably harder than it was before, not easier. Evidence, not wishful thinking, is needed to give us confidence that the new Berkshire can overcome the constraint and generate meaningful long-term outperformance.