Post #17609 by AdrianC on the Berkshire Hathaway board

Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)

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With those assumptions (which you can change at will), Berkshire would be better off sitting on zero-real-return cash for up to 7 years before buying stuff offering 8%, than to buy the average large US firm now at today's general valuation levels. If they had to wait for 8 years before getting the buying opportunity, the ten year return would be 0.7%/year worse than buying average stuff at current valuation levels today.

Berkshire's cash levels net of float have been above normal-ish for only a couple of years, so settle in...

(Cash + Fixed - Float)/Assets

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