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The week's question
In March 2025, in the thread "Re: OT, out", Umm asked the members: "Do you think it is because America is made up of magical soil that makes businesses based in America magically profitable?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: BreckHutHigh ⎊  😊 😞
Number: of 22352 
Subject: The Stock Market’s Berkshire Problem
Date: 08/21/25 1:02 PM
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"The problem that Berkshire ran into is the same issue that these big-cap tech hyperscalers are dealing with. They have exhausted their asset-light investment opportunities in arenas like media, advertising, hosting, retailing and software. They are now forced to go seek new investment opportunities in a capital-intensive investment called AI to seek their returns, just like Berkshire did with MidAmerican and BNSF. The railroads were poor investments for a long time. Charlie in the 2007 Wesco meeting said, “Railroads have long been a terrible business and have been lousy for investors. We did finally change our minds and invested. We threw out our paradigms…” Buffett and Munger did this to find investment opportunities that fit what they do. It is not different for these tech businesses. The difference is that Buffett and Munger didn’t pay for the railroads when they had the largest financial excitement flowing through, like the 1880s. The investment excitement ratio is massive in this AI capex binge. If businesses that require large capital expenditures didn’t help the greatest investor of all time, why would they help any other investor or the stock market? If it doesn’t help the stock market, we believe returns will go lower compared to the past. This is the Berkshire problem."

smeadcap.com - The stock markets berkshire problem

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This community has written 21,861 posts about Berkshire Hathaway. The article-length ones it recommended most:
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Summary of 2Q 2026 · 55 recs · 2026
3Q Summary · 53 recs · 2024
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