I'm as much of a fanboy as anyone else on this board so it took me longer than it should have to realize/accept that BRK is simply too big for anyone to run, including Buffett. I don't care about short term stock performance but on a longer term basis, it has under performed for the last 10 years and also the last 17 years (if that's not long term then I don't know what is). I picked these dates to coincide roughly with the last two stock market bottoms. No one can handle this much cash (which is why I picked the bottoms because that's when you're ideally positioned to put it to work). The problem gets worse on a daily basis and, despite their advice to others, they've been quite stubborn on returning any kind of cash at all... which means the problem only gets worse.
Buffett is rational but also human. He's had tremendous success investing in and acquiring businesses. So I think there's some inertia to move the thought process along (the switch from net-nets to good businesses also took a LONG time for the same reason; difficult to change what's working). Every fact would tell you that the ability to put money to work is behind them... Ted/Todd under performing with smaller books, WEB under performing, major mistakes in IBM and KHC with large commitments (counting opportunity cost here as I know they didn't lose $$), Coca Cola (this used to be a good investment but total return since investing is now pedestrian given that the stock has been flat since 1998 so the only return is the dividend; their own advice to not do anything for tax reasons appears to have been ignored here since WEB has complained that if they sell KO they'll have a large tax bill and would need a much better investment to make up the tax hit), General Re IRR most likely not good though difficult to quantify, BAC worked out great, but GE didn't. GS was just okay. So taken together, the fall of 2008 investments were just okay. Probably under performed the SP500. BNSF was terrific. But PCP was only slightly above average. Add to that, the mistakes of omission as told by WEB: Google, AMZN, MA/V, etc. How will they do better with MORE money?
Honest hypothetical question: If any name other than WEB was associated with this collection of assets and performance, how fast would investors be screaming A C T I V I S T? In fact, if you ignore size, isn't this the type of thing that WEB attacked in his partnership days (Sanborn map, separating business from securities)
I know I'm going to invite a lot of criticism here. I like WEB/CM and their whole philosophy more than most but I'm just trying to state the facts, to be clear eyed, and view these things outside of WEB and CM's quips and quotes. At this point, it seems Berkshire will plod along with subpar returns on assets due to, size and cash drag. Best that we can hope for is a nice deal for $80 billion+ but that just seems kind of foolish (or two deals for $40 billion but tough to imagine 10 deals for $8 billion in any reasonable time frame). How many $80 billion+ deals are there? and how many of them go for prices that WEB will pay? Deals at that size (when they come around once every 5 years) are heavily negotiated. So, in my mind, I simply adjust long-term ROE down (unfortunately) by 200 bps on a forward basis, which means 1.3x BV may well be the right price. That's my view anyway.