Buffett/Berkshire - general news

[weighingmachine]

[DooDiligence]

24 minutes ago, weighingmachine said:

 

[Eldad]

9 hours ago, Xerxes said:

A leader that doesn’t take charge is no leader at all. 
 

Greg is taking charge.  

Maybe. 
 

I thought Charlie and Warren always made fun of this? The conventional take charge leader that is tall and has a strong jaw and was the president of his fraternity. I thought the wisdom of BRK was sitting around and doing nothing 99% of the time? I thought we were just waiting for the storm that rains bars of gold? Now we love the take charge frat guy? 

[schin]

On 12/10/2025 at 3:40 PM, Rigforbadweather said:

I have seen Ted's returns for when he ran the public portfolio at Quad C, and for his entire time at Peninsula. He did 44% compounded annually over 10 years at Quad C and 31.5% annually over ~12 years at Peninsula. 

 

@Rigforbadweather - So, what do you think happened when he got to BRK? He has not even been close to that during his time at BRK. I don't think he even hit 30% in one of the many years he's been there.

[schin]

On 12/10/2025 at 6:58 PM, DooDiligence said:

https://www.businessinsider.com/warren-buffett-berkshire-hathaway-management-leadership-ceo-retirement-hamburg-combs-2025-12

 

I'm more sadden by Hamburg retiring than Todd Combs leaving... Oh... what will GEICO do without him... and the portfolio.... who can get subpar returns like him.

[schin]

11 hours ago, CassiusKing1 said:

As purchases that move the needle get harder and harder to come by, I do see a future where Berkshire is nothing more than a cash gusher that cannibalizes itself by buying back shares and pays a hefty dividend.

 

@CassiusKing1 - So, it turns into Apple circa Tim Cook! lol

[John Hjorth]

16 hours ago, DooDiligence said:

I think Buffet has been somewhat constrained by his promise of a "permanent home" for wholly owned businesses. That era has obviously passed ...

 

Jeff [ @DooDiligence ],

 

It dried out for Mr. Buffett because his modus opendi in this space has been hurdle rates exclusive leverage, while PE firms work with hurdle rates including leverate. So it dried out for him, when PE got institutionalized and a thing.

Edited December 12, 2025 by John Hjorth

[DooDiligence]

10 minutes ago, John Hjorth said:

 

Jeff [ @DooDiligence ],

 

It dried out for Mr. Buffett because his modus opendi in this space has been hurdle rates exclusive leverage, while PE firms work with hurdle rates including including leverate. So it dried out for him, when PE got institutionalized and a thing.

 

I get that part. BTW, you're supposed to yell at me in all caps for being a heretic and saying they should get rid of some of the businesses.

[schin]

8 hours ago, DooDiligence said:

I think Buffet has been somewhat constrained by his promise of a "permanent home" for wholly owned businesses. That era has obviously passed and Greg will not face the same self imposed restriction. I'd bet that there are at least a few wholly owned subs that could be sold or spun without hurting the overall business in the least. Netjets, Flight Safety, Precision Castparts, Dairy Queen, Fruit of the Loom, Garan, Oriental Trading, Pampered Chef, and more.

 

Why not pare things down into a more focused set of operations with reinvestment opportunities? I know, I know, tax advantaged structure and ability to provide low cost financing by shuttling cash around from business to business, blah, blah, blah.

 

Personally, I'm hoping for some pessimism to tank the shares in a meaningful way so I can place some of the cash I just got from last week's sale of 1/3 of my Google (couldn't resist a nice three year triple).

 

Usual disclaimer: I'm a borderline idiot and fully expect people to yell at me now. I'll make things even worse by saying that I'm making chili right now and will be adding red beans because chili without beans ain't chili.

 

@DooDiligence - I thought part of the Charlie and Warren's purchase strategy was not be the high bidder because you won't see your business chopped up by PE and it runs as long as it should run... "As a permanent collection at a gallery".    That "permanent home" was a draw to long term owner-operators was willing to get a reasonable price for not having their legacy carved up by PE.

 

Gregg will get fewer calls because of that. There are efficiencies such as all companies buying coke versus Pepsi as their soda vendor.  Warren didn't want to be Big Brother and force long standing processes/relationships at the sub level that could be optimized at the holding company level. The whole point of buying these great businesses is because See's Candie can be run by an idiot and it'll still survive.  BRK doesn't have the expertise in those businesses and didn't have fixers.

 

We are seeing that Geico needed some fixing.. and NetJets, Precision Castparts that need some TLC. Charlie and Warren would like them die naturally like Decker Shoes and the original mills of BRK... I'm guessing that Greg Abel feels he can revive them? Again, different business model and that fundamentally would change what BRK is.

 

Again, it could work.. like Apple under Tim Cook is different from Apple under Steve Jobs. Steve never liked iPhone 17 version... pro max.. pro... air... he wanted 1 easy to understand model... That tenet was broken (I don't like it), but it muddled the waters of Apple -- but, didn't kill the company..... yet. lol.

[John Hjorth]

3 hours ago, DooDiligence said:

... I get that part. BTW, you're supposed to yell at me in all caps for being a heretic and saying they should get rid of some of the businesses.

 

Jeff [ @DooDiligence ],

 

 No, that 'seller promises' thingy Mr. Buffett has so avidlly communicated and preached earlier, when he was younger [ less old], makes no sense at all, if the next generation of the sellers isen't involved any longer.

 

If you're a comglomerate, you always get rid of your laggards, and invest in what flourishes.

 

The disposal criteria should naturally not be the expectations of endless losses in future, but constantly subpar performance compared to other things inside the conglomerate [horse race, salesman management style].

 

I think I have not been vocal about that related to Berkshire Hathaway, I knew it already while buying the first shares, as a part of terms and conditions here with a dominating and controlling shareholder.

 

So I'm personally actually inline with you and i.e. @73 Reds in that respect.

 

- - - o 0 o - - -

 

Off topic, and especially for you. Some years ago you followed me into anyzing and looking at Schouw and Co. A/S, I started buying, you did move on. The two Fibertex subs still sucks, how ever small, anmd now we have had for years a young Danske Bank analyst named André Thorman [holding court on LinkedIn etc.], constantly on quarterly conference calls calling for 'release of value' in the best of the subs [BioMar],  by a separate listing, IPO of Biomar, minority, that is now in the works.

 

In short, I'm getting really tired of it! - Keep the loosers, sell the best! 

 

[Jeff [ @DooDiligence], If you know how to get a hitman to take this Danske Bank analyst out, please get in contact with me by PM, ... or I could just get it done  by going to Malmö, to get some 13 years old kiddo to take him out! GRRR! - [j/k]]

Edited December 12, 2025 by John Hjorth

[UK]

2 minutes ago, John Hjorth said:

If you're a comglomerate, you always get rid of your laggards, and invest in what flourishes.

 

Exactly...what WB used to say about this ass kicking contest in different situations, seems also very relevant here:)

[Xerxes]

10 hours ago, Eldad said:

Maybe. 
 

I thought Charlie and Warren always made fun of this? The conventional take charge leader that is tall and has a strong jaw and was the president of his fraternity. I thought the wisdom of BRK was sitting around and doing nothing 99% of the time? I thought we were just waiting for the storm that rains bars of gold? Now we love the take charge frat guy? 

I didn’t mean turning Berkshire into a Welchinian entity with P&L target. 
 

I meant that the new leader, he or she has a vision, and that vision needs a structure around it to carry it over the next 20 odd years. That vision may be wrong, maybe right. We don’t even know what that vision is. Yet. 
 

Contrast that with Jeff Immelt who just rode the intertia of GE Capital and Welchinian Way when he took over by setting cruise control until it crashed. 

[xo 1]

6 hours ago, John Hjorth said:

 

Jeff [ @DooDiligence ],

 

 No, that 'seller promises' thingy Mr. Buffett has so avidlly communicated and preached earlier, when he was younger [ less old], makes no sense at all, if the next generation of the sellers isen't involved any longer.

 

If you're a comglomerate, you always get rid of your laggards, and invest in what flourishes.

 

The disposal criteria should naturally not be the expectations of endless losses in future, but constantly subpar performance compared to other things inside the conglomerate [horse race, salesman management style].

 

I think I have not been vocal about that related to Berkshire Hathaway, I knew it already while buying the first shares, as a part of terms and conditions here with a dominating and controlling shareholder.

 

So I'm personally actually inline with you and i.e. @73 Reds in that respect.

 

- - - o 0 o - - -

 

Off topic, and especially for you. Some years ago you followed me into anyzing and looking at Schouw and Co. A/S, I started buying, you did move on. The two Fibertex subs still sucks, how ever small, anmd now we have had for years a young Danske Bank analyst named André Thorman [holding court on LinkedIn etc.], constantly on quarterly conference calls calling for 'release of value' in the best of the subs [BioMar],  by a separate listing, IPO of Biomar, minority, that is now in the works.

 

In short, I'm getting really tired of it! - Keep the loosers, sell the best! 

 

[Jeff [ @DooDiligence], If you know how to get a hitman to take this Danske Bank analyst out, please get in contact with me by PM, ... or I could just get it done  by going to Malmö, to get some 13 years old kiddo to take him out! GRRR! - [j/k]]

Historically, I don't think there is strong reason to believe that the same factors to sell the laggards didn't exist before.  For example, in 1989 WEB wrote about the "The Sainted Seven Plus One"—Borsheim's, Buffalo News, Fechheimer Bros, Kirby, Nebraska Furniture Mart, Scott Fetzer, See's Candies, and World Book.

Obviously Borsheim's, NFM and See's are still performing well, but part of BRK's model has always been to let the laggards die in place (water the flowers and starve the weeds).  There isn't much benefit to weeding - nature will take its course.  Even the flowers from the Sainted Seven are tiny so aren't material contributors to BRK's financial performance in 2025. 

[xboojum]

8 minutes ago, xo 1 said:

Historically, I don't think there is strong reason to believe that the same factors to sell the laggards didn't exist before.  For example, in 1989 WEB wrote about the "The Sainted Seven Plus One"—Borsheim's, Buffalo News, Fechheimer Bros, Kirby, Nebraska Furniture Mart, Scott Fetzer, See's Candies, and World Book.

Obviously Borsheim's, NFM and See's are still performing well, but part of BRK's model has always been to let the laggards die in place (water the flowers and starve the weeds).  There isn't much benefit to weeding - nature will take its course.  Even the flowers from the Sainted Seven are tiny so aren't material contributors to BRK's financial performance in 2025. 

 

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.

[oscarazocar]

39 minutes ago, Xerxes said:

I didn’t mean turning Berkshire into a Welchinian entity with P&L target. 
 

I meant that the new leader, he or she has a vision, and that vision needs a structure around it to carry it over the next 20 odd years. That vision may be wrong, maybe right. We don’t even know what that vision is. Yet. 
 

Contrast that with Jeff Immelt who just rode the intertia of GE Capital and Welchinian Way when he took over by setting cruise control until it crashed. 

 

Immelt was a heroically bad CEO, mostly because of terrible large scale M&A, with a unique talent for buying at the top and selling at the bottom - Alstom Power, Baker Hughes, NBCUniversal, etc.

 

For those who like big company disaster porn, there are two books on the topic that are very good - Light Out by Ted Mann & Thomas Gryta and Power Failure by William Cohan

 

[Jaygo]

2 minutes ago, xboojum said:

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.

 

I totally agree. I think the hands off approach was too relaxed and not the right style as the company grew bigger and especially now that warren is leaving. 

 

You have to look at it from a human perspective. Imagine its the early 80's and WB just bought your company, that would be the greatest signal ever you have succeeded in life and now you really want to please him (you bust your ass) fast forward 30-40 years and management of that same company has changed many times over and now you sit at the bottom of a massive conglomerate where your yearly numbers are half what BNSF does by breakfast. You have never met WB and have no chance of catching his eye anyway. Your growth cap-ex ideas get ignored and all profits disappear into the beast that is BRK. Most humans would take that Friday off and in general not give a crap anymore (you slack off)

 

My guess is this is happening all over the place inside BRK and Greg is going to get the juices flowing or send those companies out the door to PE. I have anecdotes but am not interested in discussing for the sake of my contacts.

 

I am in the camp of BRK having a very bright future ahead and margins will slowly increase company wide

[xo 1]

7 minutes ago, xboojum said:

 

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.

Jeff Matthews elaborated on this approach nearly 20 years ago in his Pilgrimage to Omaha.  Looking at Sherwin Williams success, I certainly would prefer that Benjamin Moore had become Sherwin.  But I'm not persuaded that is the lack of capital so much as lacking the top 1% CEO that Sherwin found.  Benjamin Moore is an especially hard example, since it had so-bad-it-reached-the-news leadership, but I think Marmon illustrates that it isn't so much sketching out the strategy as executing that takes extraordinary talent and perhaps luck.  I don't perceive that BRK subsidiaries have been denied capital to grow, but they are held to articulating how the use of capital will result in returns in a more disciplined way than CEOs of publicly traded companies are.  This is the animal spirits / institutional imperative diliemia that WEB has long discussed.  Looking only at winners in that game doesn't tell us much about the likelihood of having replicated it.  Bolt-on acquisitions have long been a favorite way of growing for BRK, but I agree Clayton Homes is one of the few examples I can think of organic growth.   

[Xerxes]

37 minutes ago, oscarazocar said:

 

Immelt was a heroically bad CEO, mostly because of terrible large scale M&A, with a unique talent for buying at the top and selling at the bottom - Alstom Power, Baker Hughes, NBCUniversal, etc.

 

For those who like big company disaster porn, there are two books on the topic that are very good - Light Out by Ted Mann & Thomas Gryta and Power Failure by William Cohan

 

Agreed. But you are talking about post-2008 Immelt. When he actually provided datapoint of how bad he was. 
 

I am arguing that pre-2008 Immelt was bad because he failed to step out of the big man shadow back 2001. And that is mistake that Greg ought NOT to make. Regardless, of how good of operator he actually is. 
 

It is his ship now. And a captain takes charge. 

[Xerxes]

We ought to want Greg because he is Greg. Not because we imagine him to be “folky”, “holding court” and exchanging war stories at AGM.  

[DooDiligence]

I frequently make poorly thought out posts here, and I almost always get really good comments that help shape my thinking. Thanks to all!

 

Special shoutout to @oscarazocar for introducing a brand new genre of business reading, "Big Company Disaster Porn"

 

[CassiusKing1]

3 hours ago, Xerxes said:

We ought to want Greg because he is Greg. Not because we imagine him to be “folky”, “holding court” and exchanging war stories at AGM.  

This.  I'm very eager and excited to see Greg's version of Berkshire!

[DooDiligence]

Same. I'm also eager for some skeptics to get tuned up and drive the price down into serious buyback territory.

[schin]

5 hours ago, xo 1 said:

Jeff Matthews elaborated on this approach nearly 20 years ago in his Pilgrimage to Omaha.  Looking at Sherwin Williams success, I certainly would prefer that Benjamin Moore had become Sherwin.  But I'm not persuaded that is the lack of capital so much as lacking the top 1% CEO that Sherwin found.  Benjamin Moore is an especially hard example, since it had so-bad-it-reached-the-news leadership, but I think Marmon illustrates that it isn't so much sketching out the strategy as executing that takes extraordinary talent and perhaps luck.  I don't perceive that BRK subsidiaries have been denied capital to grow, but they are held to articulating how the use of capital will result in returns in a more disciplined way than CEOs of publicly traded companies are.  This is the animal spirits / institutional imperative diliemia that WEB has long discussed.  Looking only at winners in that game doesn't tell us much about the likelihood of having replicated it.  Bolt-on acquisitions have long been a favorite way of growing for BRK, but I agree Clayton Homes is one of the few examples I can think of organic growth.   

 

The same way one could have said Benjamin Moore should be Sherman Williams like GEICO should have been Progressive. 

 

One can say Progressive and Sherman Williams has a tougher road to get capital from bankers that need to justify to BoD and short term focused shareholders.. yet, BM and GEICO just had to justify to one bellybutton.

 

Maybe, capital ask was easy.. but, strategy or vision was not at those respective companies?

[schin]

5 hours ago, Xerxes said:

We ought to want Greg because he is Greg. Not because we imagine him to be “folky”, “holding court” and exchanging war stories at AGM.  

@Xerxes - Out of all the subsidiaries of BRK, Greg might be the best person to understand the culture, but would you say Greg Abel is a Fortune 25 CEO if he wasn't at MidAmerica -- because he's running that size of a company. Even David Sokol didn't bounce back at a Fortune 25 company. 

 

He seems to be a good fit at FFH, but still it's not the same statue at BRK.

[LC]

3 hours ago, schin said:

The same way one could have said Benjamin Moore should be Sherman Williams like GEICO should have been Progressive. 

 

One can say Progressive and Sherman Williams has a tougher road to get capital from bankers that need to justify to BoD and short term focused shareholders.. yet, BM and GEICO just had to justify to one bellybutton.

 

Maybe, capital ask was easy.. but, strategy or vision was not at those respective companies?

 

Can we think of a single Berkshire company that is the definitive #1 leader in the field? Has Berkshire fully owned or developed something like a Google, Tesla, etc.?

 

I can't think of one.

 

Point being: I don't think Warren's version of Berkshire liked being operators or being 100% owners. They bought things that Warren was hoping would not require a lot of management or operational talent - think moaty stuff like railroads or Geico when it had a definitive cost advantage (employee owned). 

 

I think he just wanted to sit back and buy 10% stakes in stuff that turned $1.00 into $2.00 

 

Moving from that model to something where operations are #1 and passive investing is #2...it is a big shift.