No. of Recommendations: 23
Greetings,
Full disclosure, I sold more than 90pct of my Berkshire last year at higher prices because of some of the same issues I still have today. It had been a large percentage of my stock portfolio since 2000.
I also believe this is one of the safest companies out there.
Here are my issues.
First, I believe that reinvestment of float and flows from the operating businesses is the biggest driver of the company going forward. Greg Abel has no experience in managing investment portofolios a tenth of the size of what is available today. Ted Weschler has decades of expereince managing portolios. Why not allow him to manage 50%? This is very strange to me.
Second, Geico, after a nice turnaround by Todd Combs, is now forced to invest significant dollars into advertising. Auto Insurance is an incredibly competitive field that has been overearning for quite some time now.
Third, Berkshire Energy is less valuable and more vulnerable than it was 5 years ago.
Fourth, Ajit is now 74. He has been working at Berkshire for 40 years. He sold half his shares in September 2024. The bench may be deep but first losing WB and everything he brings to the table (let's not forget many of the special deals he orchestrated during crises over the last thirty years)and likely Ajit in the not so distant future, doesn't make me more sanguine on the company.
There are many counterpoints of course. Rock solid balance sheet. BNSF. Some operating business turarounds. I just feel that buying shares at close to 1.5X book or in my estimation a very small discount to IV, is not a great use of capital. Its fine, but first I think it is paramount to put someone with a solid track record and vast expericne to allocate that 300B+ sitting on the balance sheet. Is Greg Abel that person? I don't know but I do know how important that question is to the future value of Berkshire.
To reiterate, buying shares here is fine but I don't feel like this is an opportunity to even slowly accumulate/back up the truck as I have felt many times in the past twenty five years.
What am I missing?
DQ
