No. of Recommendations: 3
<<. I wonder whether Greg will be more inclined to consider selling some of these businesses to interested PE types or whether he would rather honor Warren’s approach to strive to keep them within the BRK family, as long as they are not costing us money year after year.
What do you shrewds think? How do you see it playing out? Thanks>>
Tex, I concur with your analysis. Berkshire’s STRUCTURE we hope and presume will remain intact: the powerful engine of Insurance driving all that cost free leverage via Float, redistribution of cash flows to the most preferred sources, the large collection of operating companies, and of course the investees.
But..to your point… the eclectic collection of smaller subsidiaries? Not sure all will be retained. I could see several being sold off to private equity or whomever. Buffett promised not to do this. He’s stood by his word. For his entire life. Not playing gin rummy. Future Berkshire under new management and enormously larger, probably doesn’t need to waste all that time managing/overseeing these businesses.
I also believe, as Berkshire is pressured post Buffett by activists, it will make modest concessions and spin off a couple large—possibly very large operating companies. But most importantly, the STRUCTURE will remain intact. For me, that’s what’s most important. And you have a Board of Directors committed to making that happen.
