No. of Recommendations: 6
Well, I’ll offer some thoughts, starting with the investment mix. Berkshire ended Q3 with $703.2B in investments, with the following investment allocation:
Equities, 40.2% ($282.3b)
Fixed income, 2.5% ($17.9B)
Cash, 10.2% ($72.1B)
T-Bills, 43.4% ($305.4B)
Equity method investments, 3.6% ($25.5B)
Asset allocation is the most important investment decision (both for Berkshire and for individual investors), more important than individual security selection. Who will make this decision?
Berkshire’s five largest equity holdings as of today are:
AAPL, 22.7% of equities (($60.6B)
AXP, 18.8% ($50.4B)
BAC, 11.0% ($29.3B)
KO, 9.9% ($26.5B)
CVX, 7.1% (19.0%)
I think that a reasonable choice to manage the $283b equity portfolio (40.2% of the total investment portfolio) would be Ted Weschler, Buffett’s choice to manage equities. I also think that Ted, with input from Greg Abel and the Board of Directors, would be a reasonable choice to determine asset allocation. Greg Able should not manage the investment portfolio, as he has no track record in doing so. Outside money managers should not be used to select securities or set asset allocation. The asset allocation and equity portfolio should be disclosed each quarter, as they are today. Also the track record of the equity portfolio and of the total investment portfolio should be publicly updated at least annually.
How's that for bold suggestions? Thoughts?
