By Jim Sloan:
I recently published two SA articles focusing on strengths of Berkshire Hathaway (BRK.B). The first sprang from a Buffett comment about owning stocks you would be happy to own if the market were closed for a significant period and asked which of the five largest U.S. companies by market cap you would be reasonably confident owning if the market were closed for twenty years. I explained why my first choice would be Berkshire and my second would be Exxon (XOM) – the companies with the greatest capital discipline and strongest reinvestment opportunities.
In the second piece I questioned the methodology of an assertion by the recent "Buffett’s Alpha" paper that Berkshire’s public portfolio had outperformed its private holdings. Not only have the private holdings probably outperformed (although exact measurement is difficult), but I argued that recent major acquisitions have begun a transformation into a New Berkshire Hathaway, which