u/Hathaway100

The vultures, activists, are circulating MKL, using short-term issues to advocate change. Specifically, they want the company to sell its non-insurance businesses. (A terrible idea). Anyway, the subs earn around $850 and the activists are valuing that portion at $10 B or a 11.7 multiple.

I would argue that the BRK subs are superior and should be valued higher than MKL. 15x is not unreasonable, which equates to 750 B based on $50 B in earnings.

Like Y, MKL would be a natural fit for BRK.

Throughout its history, BRK has dabbled but never taken a meaningful position in pharmaceutical or the medical device sector.

The drug discovery business is costly and cyclical. Patients expiring is also a negative. A few of the reasons Warren had passed.

Nevertheless, money can be made when purchased at the price. Owning whole would be similar to a utility. For example, BRK could buy PFE and, rather than distribute around $10 B in dividends, use the funds for research, acquisitions or debt reduction. That alone would give BRK a competitive advantage.

A premium price of $32 a share would cost around $180 B if the PFE board would consent.

An explicit agreement exists anytime Warren acquired a business outright. The seller would not get the best price. In return, he or she would be granted near autonomy in managing the operation. As a result, the subs were not necessarily run as efficiently as their peers. This trade-off has worked well for BRK partners.

Clearly, Greg had already stated that he is seeking “operational excellence” and has already shown his willingness to meddle with the subs.

This new philosophy poses a new risk. Knowing the expectations of the CEO had changed, a perspective seller now might demand a higher price because his/her company will no longer “be placed in a museum.”

Oxy Chem is not a relevant example because though the transaction closed in 2026, the deal was initiated while Warren was the CEO. The next purchase will be the test.

The good news is that BRK is flexible in its capital allocation decisions. My hunch is that over the next ten years BRK will spend more on repurchases than acquisitions, following the Teledyne 1972-1984 model.

Winston Churchill once described the Soviet Union as a “riddle wrapped in a mystery inside an enigma.” I felt much the same in watching Greg’s March appearance on CNBC. However, I just might have an explanation now. Here are some inferences.

1. Warren and Charlie operated under the belief that the least information revealed about the business, the better.. By announcing the buyback, Greg is clearly signaling that he will be more transparent. The annual report and the meeting are further proof. Though this, so far, is the biggest difference between Warren and Greg, the impact to the business will be minimal.

2. The paltry $235 can be viewed as a good faith token gesture. As insiders, Warren and Greg poses an informational advantage over their partners. Theymight not have wanted to be accused of front running the May press release.

3. The May to June period will be the true test. If after the results are public, I will then conclude that they, wrongly in my oniony, believe the stocks does not trade at an acceptable discount to IV, conservatively calculated.

4. This decision will be meaningless to me. Because if I am correct in my evaluation, then market price and IV will eventually merge, although time frame unknown.
   I

If I could pick any business for BRK to purchase , I would select Koch Industries. Located in Wichita, KS? the companies share the same Midwest sensibilities. Being a private enterprise, its financial are opaque, although revenues are around $125 B. The most I can envision BRK paying is 1.5x or $180 B. Moreover, there are overlapping businesses so the transaction could face regulatory roadblocks. But I can always dream.

Greg had been the CEO now for one full quarter. During this time, BRK reported acceptable revenue and profit growth, completed an opportunistic acquisition (OXY Chem), initiated a strategic long term partnerships (Tokyo Marine and Life), improved operational efficiencies ( BBSF), sold non- core equities at a profit, and maintained the culture. Grade: A.

Next year marks the 70th anniversary of the Buffett Partnership (dissolved in 1969). For his contributions to business, finance and investing, the time is right for the committee in Oslo to award Warren the Nobel Prize in economics.

In 27 years of being a BRK partner and studying Warren and the business, I have discovered the factors that make the company unique and special compared to every other on this planet known as Earth. (Sounds like the definition of a moat). BRK can allocate any amount of capital at any time in any industry at lightning speed. That is its secret weapon.