Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 14
However there's no reason to expect a collection of conservative businesses to hold their share of an innovative economy like the US, a slow and gradual loss of share should be expected and is not a bad outcome.

Hmm, I'm a "glass half full" kind of guy, but that seems too optimistic.

There are certainly a few firms enjoying spectacular economic results lately, but the more important point is that times
are pretty good generally and one might expect an average or allegedly better-than-average collection of businesses to be doing pretty well in this economy.
Forget the few well publicized big winners.
Berkshire's operating earnings are not keeping up with the average firm. They are bad.

On the other hand, the investments have done very well.
So overall results are good, if not exciting.

My valuation, overly simplified, breaks things down into those two categories.
Even with a big "haircut" to equities this year, each side of the firm, (cyclically adjusted) investments and (cyclically adjusted) operating earnings, is up the same 9.5%/year compounded for the last five years.
So, of course, the overall valuation estimate is up the same amount.

That's a good result, overall.
Many things do better, but Berkshire's predictability is high. Nothing else comes close in terms of "near-worst-case" return.

Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.