Ephemeral Fortunes

by

The name of Buffett, it echoes still, a resonance from a time when accumulation felt…different. Sixty years he spent at the helm of Berkshire Hathaway, a long autumn of compounding. The company flourished, of course, a slow, insistent growth, averaging a twenty percent yield, while the broader market, the S&P 500, settled for a more modest ten percent. But averages, like fallen leaves, conceal more than they reveal. They do not speak of the hidden frosts, the unexpected storms that buffet even the most carefully tended garden.

He has withdrawn from the daily tending now, this Oracle of Omaha, yet his presence lingers, a scent of cedar in the air. And the methods, the slow, deliberate cultivation of value…they remain unchanged. Berkshire continues to sow its capital, spreading it across a field of publicly traded companies. Forty-one seeds have been cast, and among them, a few appear to be stirring. DaVita, Kraft Heinz, and, with a certain hesitant caution, UnitedHealth Group. But the earth yields its bounty grudgingly, and even the most promising shoots can wither under an unkind sun.

A Hesitant Bloom: DaVita

Berkshire first invested in DaVita, a keeper of kidneys, back in 2011. A decade and more of tending. For a time, it flourished, but lately, a pallor has settled upon it. Doubts have crept in, whispers of slowing growth. Yet, the most recent quarterly report offered a flicker of hope, a surprising resilience. The earnings exceeded expectations, a small victory in a season of disappointments. And the projections for 2026, exceeding even those expectations, suggest a potential turning of the tide.

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Currently, the valuation is…modest. Nine times forward earnings. A price that suggests a certain fragility, a vulnerability to the elements. The stock has surged, yes, by thirty percent since the report, but there is still room for expansion, a chance for the bloom to fully unfold. It once traded at fourteen times earnings, a more robust, sun-drenched valuation. But the market is a fickle gardener, and past glories offer no guarantee of future harvests.

The Weight of Lost Seasons: Kraft Heinz

Kraft Heinz. A name that carries the scent of kitchens long past, of simpler times. Berkshire’s investment, a substantial stake worth billions, has proven…difficult. A losing season, it seems. Billions lost, and the possibility of a partial retreat. But perhaps, for a new investor, there is an opportunity. A chance to glean something from the wreckage.

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The current valuation, nine times forward earnings, is…attractive. A discount, compared to its peers. And the company’s plan to split into two entities – one holding the faster-growing brands, the other the slower – is intriguing. A separation of wheat from chaff. A gamble, certainly. But the past offers a precedent. Kellogg did something similar in 2023, splitting into Kellanova and WK Kellogg. Within two years, both were acquired, creating value for shareholders. A fleeting spring, perhaps, but a spring nonetheless.

A Chill Wind Blows: UnitedHealth Group

Berkshire purchased five million shares of UnitedHealth Group last summer, a gesture that seemed to herald a rebound. A tentative reaching for the sun. But the winter returned with unexpected ferocity. The government announced lower-than-expected Medicare Advantage payments, and UnitedHealth was forced to revise its guidance, sending the stock tumbling from $350 to around $280. A harsh reminder that even the strongest trees can be felled by a sudden storm.

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The stock has dipped, yes. But think twice before reaching for it. It still trades at sixteen times forward earnings, a premium to its peers. The past growth story is unraveling, and there may be further compression of the valuation. A lingering frost, a reluctance to bloom. The market, like nature, is a patient observer. It will wait for a true sign of spring before offering its warmth.

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2026-02-09 06:32