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But the true mistake Mr. Market makes is admitting a great business is undervalued but claiming there is no "catalyst" to change that.

This gets back to the ability to leverage time arbitrage. If a "catalyst" is nowhere in sight for Mr. Market (meaning a matter of weeks, months, or at most quarters), it is as if no catalyst will ever exist.

A good example from the recent past involves housing related stocks. I never liked the idea of investing in a direct play such as home builders but I did invest in two small cap title insurers at discounts to tangible book. I started building positions in early 2010. In one of the companies, I was able to make purchases at prices similar to what I paid in early 2010 in late July of this year. Over that two year period, the stock fell 40% from my initial cost basis at one point and then came back to where it started. No capital gains for two years. Dead money. Then the company's stock proceeded to more than double over the course of a few months in late Q3/Q4. There wasn't any particular "catalyst" other than Mr. Market no longer viewing anything with even a hint of "housing" exposure as permanently impaired.

That's how things seem to work in the stock market. Those who insist on buying things that are demonstrably cheap ONLY WHEN a catalyst is in sight throw away many opportunities that they could otherwise take advantage of. Right now there is no catalyst for Berkshire and I have no idea what the eventual catalyst might be. But it is demonstrably cheap. Sure, everyone would like all of their investments to play out immediately since annualized returns are maximized when things play out rapidly. But I don't know of any way to do that and I doubt anyone does.
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