xboojum

ALLE (which I've owned in size in the past) always struck me as something that would fold up nicely in the Berkshire construction mfg. sectors with Johns Mansfield and Benjamin Moore (I think it's a better business than either, honestly).

I for one think that's really interesting context, so thanks. And I am I think in the "swing, you bum!" peanut gallery, where I don't think that building up a dragon's hoard of capital and waiting for a downturn while just doing nothing around the margins is the best strategy, so I'm hoping that having a touch more centralized and active governance under Abel gets things moving while we wait, possibly another decade, to fire that elephant gun. (I remain disappointed that Marmon, which I hoped would turn into something like ITW as a place that could soak up capital for a lot of different uses, doesn't seem to have really turned into that.) Selling down the Apple investment as far as he did without anything apparent to do with the cash other than clip coupons was dispiriting to me. Finally, the mention of Dairy Queen was interesting not for the McDonald's comparison, which truly is ludicrous, but there does seem to be some movement in a company that I think was probably undermanaged for a decade or more of Berkshire's ownership.

I'll make myself unpopular not by defending this take (which I think is bad) but by saying that I do think there's something to the idea that ownership by Berkshire prevents most subsidiaries from really dominating their industry; the capital getting sent upstream rather than reinvested in the business is the right decision for mediocre businesses (or even ones like See's that don't have much opportunity to reinvest) and the wrong one for world-beaters. Of course most of the businesses under the umbrella are somewhere in-between, making things trickier, but it's a pretty common pattern, comparing e.g. Benjamin Moore to Sherwin Williams, or BNSF to the independent Class I rail companies, or even in recent years GEICO (for decades a world-beater!) to Progressive. But the prescriptions in the tweet are bad because he doesn't seem to understand why Buffett diversified, and the individual comparisons (Nebraska Furniture Mart, a furniture store with a bare handful of locations, vs. Home Depot, one of the great American retail successes of the last 50 years that doesn't sell furniture?) are risible, but I think it's probably true, overall, that Berkshire's subsidiaries tend to underinvest in themselves compared to their hindsight-selected category winners. There's a reason he's comparing (and it's a bad comparison) See's to Hershey's and not Sow Good (or Kraft). The other thing is that if he's complaining about Buffett not producing the results he did in his relative youth, Buffett's results as a pure stock-picker aren't as good as they were in his youth! It's not just size; the market doesn't reward the same things that Buffett was zeroed in on when he was accumulating his stake in Coca-Cola or Cap Cities. Those opportunities largely don't exist any more! He's probably right that if someone could reliably compound the $300 billion cash pile at 20% a year, selling off the subsidiaries and becoming a pure-play insurance-and-securities company would make people more money, but that's like asking why Warren doesn't wave his arms and fly to the moon. A final issue that this guy elides is that the Western power companies, where Buffett really was happy to reinvest billions upon billions of dollars, got hit by the one-two of tax changes under Trump and global warming-enhanced fire risk (which certainly aren't unique to BHE, look at PG&E).

Never say never, but it seems to me that true elephant-sized takeover of a private business is pretty unlikely at this point. If you were a family-owned giant like, say, Mars, why would you choose less money and still give up control to Berkshire? Something the size of e.g. Sheetz could certainly be taken down, but as you say, that's essentially an OxyChem-sized deal at this point rather than a needle-mover. And I think they could be doing more of these, but they've never built up the repeatable framework for doing serial acquisitions. They might be able to land some public companies, too, but as private equity has gotten bigger and bigger (and Buffett has shown an admirable unwillingness to overpay) that seems less likely, too, although Alleghany was a welcome exception (although not that much bigger than OxyChem). There just aren't that many $50 billion-plus acquisitions out there that make sense, don't involve a nosebleed control premium, and would represent a willing partnership; I think you'd have to see some sort of market dislocation for it to happen.

Brooks is a wonderful company that makes a great product (I wear Ghosts when I run) but absolutely aren't the definitive leaders in the category of even "running shoes", let alone "athletic shoes": https://therunningchannel.com/what-are-the-most-popular-running-shoes-usa/. BH Automotive is I believe about a third the size of Lithia. I'm not sure what field you could even say Marmon Group leads in (versus Kerlite or Union Tank Car or something). (Flight Safety is a great answer. I think Clayton Homes and Shaw are both the largest in their field, at least if you restrict comparison to carpet versus overall flooring. Forest River, depending on what segment you look at, probably fits the bill too.)

I'm a "you gotta do more" guy, to be honest*, but some of the ice is already breaking, at least; Scott Fetzer sold Kirby vacuums to I believe a private equity company in 2020 or 2021. * I think a 100% legitimate criticism of Berkshire is that the combination of the hands-off approach Buffett takes and the strategy of pulingl capital up to the parent companies means that there are places, particularly in the midsized operating companies, where Berkshire's low cost of capital could have been used to make the businesses a lot bette. Uniform companies and paint companies both benefit from the network effect of having the most locations/customers on a route, but Fechheimer and Benjamin Moore just aren't playing the same game Cintas/Sherwin Williams are; Marmon doesn't seem to have served as the ITW-style rollup I thought it was going to be; etc.

Why would Fairfax care about an enormous decline in auto insurance claims? (Separately, why would large language models reduce workers comp claims?)

The advantage of the Duracell swap (or the Florida television station with Graham Holdings) was that he didn't have to pay capital gains taxes on the stock he exchanged, whereas he's underwater with the OXY position as a whole and flush with cash. The 8% coupon from the preferred is better than he can get clipping T-bills. Further, from OXY's point of view, the preferred equity, not debt, and they're trying to shed debt. I can't see why a non-cash transaction makes sense for either side.

It's not the same but it rhymes: https://www.ft.com/content/cdb5ad3e-1c11-48af-9852-00ccc147abbf (subprime auto lender Tricolor blew up, and now it looks like debt-fueled auto parts rollup First Brands is going to have to file Chapter 11 after dodgy accounting). See also https://www.bloomberg.com/news/articles/2025-09-17/tricolor-bankruptcy-subprime-auto-lender-s-collapse-fuels-asset-fight:

Dave Waters of Alluvial Capital wrote up Grupo Herdez (salsa and sauces maker) about 18 months ago; it popped 30% today on news that McCormick is buying out half of Herdez's (previously 50%) stake in their Mexican JV at a $3 billion valuation. https://alluvial.substack.com/p/a-mexican-blue-chip-bargain

FWIW I checked Wikipedia, and the volume they were putting through factory outlet stores was sufficient that they couldn't fill it solely through factory seconds and started using it as a way to clear shoes that weren't selling due to fashion issues, seasonality, etc.: Harold Alfond on Wikipedia

It's worth remembering that part of Dexter's secret sauce was the use of factory outlet stores, which is a model they invented; if they're moving a significant amount of their inventory via selling factory seconds (as they originally and perhaps always were were) or more cheaply made/finished models to compete with lower-cost models (which is what a lot of "factory outlet" stores sell; I don't know about Dexter specifically), and then there's no reason to go to a special store to buy the discounted ones because you can just go to Wal-Mart or Payless to buy a cheaper pair made in Vietnam, the whole model collapses. I don't think Dexter had any particular brand equity; they were just optimized to make and sell cheap shoes, and then one day shipping containers started delivering a better mousetrap.

From a comment on the sports blog Defector: * JJ Redick is in college: LeBron 27/7/7 * JJ Redick, NBA rookie: LeBron 27/7/6 * JJ Redick, NBA starter: LeBron 27/7/6 * JJ Redick, 15 year vet, LeBron 25/8/8 * JJ Redick analyst/podcaster: LeBron 26/8/7 * JJ Redick is LeBron's coach: LeBron 25/9/8 Just a machine.

https://www.geico.com/driveeasy/ GEICO has created their own version of telematics. They were just late to the game and aren't using it effectively yet, as far as I can tell. (If Todd can improve things, there's no shame in GEICO running second-best behind Progressive, which seems to be shooting the lights out right now; a lot of the complaints about a less pleasant culture at the GEICO home offices sound like the sorts of things that happen when a company is underperforming and the CEO wants to trim deadwood.) And say what you will about BNSF, they didn't just wake up and realize, "Oh, precision scheduling is a thing!"; there has been a conscious management decision, going back years, that they don't want it (whether due to the fact that it pisses off customers—which it does—or a desire for better relations with their unions or concerns about regulation, I don't know, or maybe something internal; you'll note that even with Harris parachuting in as an operations consultant, they're not talking about implementing it). The Ben Simmons comparison is funny, not because anything important at Berkshire has collapsed as thoroughly as The Process, but because I think there's something to the idea that the Buffett of 2024 is afraid to shoot! Things have repeatedly worked out poorly to suboptimally for him over the past decade, offset by the enormous success of Apple and the solid performance at size of the sogo shosha investments.

I think you're misreading the statement, which says "relative to". So if their margins were five points better than Norfolk's and now they're four points better, that's relative slipping.