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Notably absent from the list: Berkshire Hathaway.

So what do we make of that??

Not too long ago, Mungofitch teased us with a discussion about Berkshire's low ROE, but never gave an "answer" as to why.

In light of this thread, does anyone want to try to reconcile the fact that while Berkshire certainly seems to be productive in generating substantial value year in and year out, it has a mediocre ROE?


As to the mechanical screening thing, I've been entrigued many times, but just can't bring myself to commit worthwhile amounts to such a "blind" approach.

But a more do-able approach for me is to use some general characteristic (such as the long-term ROE here) to define a small universe of likely-good prospects, and then within that universe, use the usual-suspects to pick what I hope is the cream of that crop.

One could do a lot worse than sticking to the businesses listed above as one's investing "universe". Except that Berkshire is missing...
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