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Buffett letter TLDR: book value is for chumps, and we’re gonna financial engineer the hell out of this industrial conglomerate.
It’s exactly the GE pitch I heard ad nauseam from 2005+ ... the cultists can @ me all they want, but this IS the Jeff Immelt playbook.
It’s exactly the GE pitch I heard ad nauseam from 2005+ ... the cultists can @ me all they want, but this IS the Jeff Immelt playbook.
In 2005, GE was an industrial conglomerate that desperately wanted to be thought of (and valued as) a financial services firm.
In 2019, BRK is a financial services firm that desperately wants to be thought of (and valued as) an industrial conglomerate.
Funny world, innit?
In 2019, BRK is a financial services firm that desperately wants to be thought of (and valued as) an industrial conglomerate.
Funny world, innit?
The BRK-as-investment-fund narrative ("we can buy companies w/your $100 billion in cash better than you can") is too hard to maintain today. With an industrial conglomerate narrative, Buffett can use the cash to buy back BRK stock hand over fist. Which is what he's going to do.
So now that BRK wants to be an operating conglomerate, what's the over/under on how long an activist HF waits after Buffett's retirement/death before making a break-up-Berkshire-to-unlock-value pitch? 30 seconds? You just know that GS bankers are already working on the book ...
People taking this thread as anti-Buffett have got it all wrong. He is the metagame GOAT. The old narrative supporting the stock (I buy companies) doesn't allow him to use the cash, so he's making a new narrative (I operate a company) that does. It's his final (?) masterpiece.
What drives Berkshire strategy today? What drove GE strategy 15 years ago? What drives the strategy of every conglomerate once they stop acquiring?
To paraphrase James Carville: it's the multiple, stupid.
To paraphrase James Carville: it's the multiple, stupid.
