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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
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Author: rnam ✧  😊 😞
Number: of 16622 
Subject: Buffett's Intangible Moats
Date: 08/24/2025 9:23 AM
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No. of Recommendations: 10
Excellent analysis on Buffett's evolving investment style.


In 1978, tangible capital still formed the foundation of Buffettʼs portfolio companiesʼ value. However, over time it declined in importance as intangible assets took center stage. Brand equity was the first intangible pillar to gain prominence, followed by human capital. Only more recently with Buffettʼs Apple investment have intellectual property and network effects come to the forefront.

Since 1978, the Market factor has delivered the highest total return, followed by Momentum, Intangible Value, and Quality. While Value produced solid returns until 2007, it has been in a prolonged drawdown ever since. Meanwhile, Small-Cap has not generated any return over this period.

Buffett has consistently maintained positive exposure to three factors: Intangible Value, Quality, and Value. However, while the first two contributed steadily to returns, Value only contributed until 2007 and has been a drag ever since.

Our regression results showed that, among the factors we tested, only Intangible Value and Quality exhibited consistently significant and positive exposures across time periods and model specifications. These two factors also contributed consistently to Buffettʼs excess returns, even after controlling for sector biases.

We believe international expansion is a particularly prudent move. Non-U.S. stocks currently trade at a roughly 50% discount relative to their U.S. peers, providing a richer hunting ground for long-only value investors like Berkshire.



https://blog.sparklinecapital.com/wp-content/uploa...
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