OK, that article is dated March 10, 2008. With the benefit of hindsight I'd say that it did not age well. It also doesn't make sense. In my opinion the article doesn't even make a case to short BRK. A reason not to own it, maybe, but not a short. The only bit that actually carried some weight was valuation. In March 2008 BRK was trading at 1.75 book. That was definitely pricey and in my view overvalued somewhere in the range of 15-25%. But then in March 2008 pretty much everything was overvalued.
Those that were worried about growth back then consider this. In the 10 years that followed Berkshire grew itself by 150%. Assets in q1 2008 were 281 Bn. In q1 2018 they were 703 Bn. And they did that in a very conservative way. That's impressive! Even more impressive was GEICO. Q1 2008 premiums - 3 Bn. Q1 2018 Premiums - 8 Bn 167% growth.
When it comes to Berkshire, I don't even mind if the company somewhat under-performs the S&P. When you're investing you're getting paid to take risk. In my view Berkshire's risk is below the S&P risk. If it somewhat over-performs the S&P I'm getting paid handsomely for the risk I'm taking. But then I'm probably not as greedy as some on you.
Your 1st sentence mirrors my exact thought that the article "did not age well".
The idea was to start a conversation which would expand from there.
WEB himself has remarked in nearly every shareholder letter that the future prospects of insurance are gloomy & yet...
As I've said in other threads, I am primarily interested in preserving the future value of what I own & am not looking for big gains.
To this end, I am trying to follow Howard Marks comments regarding "protection from downside".
I think it's delusional, at best, to look at any company &
imagine what COULD happen to make the price of the stock go up (happens a lot on Yahoo finance boards but not here) & although it may be equally insane to believe that I can imagine potential disasters, I believe that it's far more constructive to attempt to do so.
The difference between a sell side & a buy side analyst, no?
Keep in mind that this goes far to the opposite end of my normal, every day, optimistic outlook, which is nearly indomitable.
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in·dom·i·ta·ble
/inˈdämədəb(ə)l/
adjective
impossible to subdue or defeat.
"a person of indomitable spirit"
Synonyms: invincible, unconquerable, unbeatable, unassailable, invulnerable, unshakable, unsinkable.