Berkshire’s Enduring Appeal

by

The holdings of the Bill & Melinda Gates Foundation Trust – a considerable sum, nearing thirty-six and a half billion dollars – reveal a certain… deliberation. Nearly a third of this fortune, a figure approaching eleven billion, is concentrated in a single equity. It is not a capricious wager, however, but a reflection of a longstanding acquaintance, a quiet mentorship, and, one suspects, a mutual appreciation for the unhurried tempo of value. For this is no mere investment, but a continuation of a dialogue begun decades ago between two men who seem, in a world obsessed with the instantaneous, to have found a shared refuge in the long view.

Mr. Gates, as is well known, has long benefited from the counsel of Mr. Buffett. The latter, a figure who regards speculation with the same polite disdain one might reserve for a poorly-made watch, has not only served as an advisor but, since 2006, has pledged a substantial portion of his own wealth to the Gates Foundation. A gesture, it must be said, that speaks volumes about a shared belief in the power of patient capital, and a quiet disdain for the ephemeral.

The Cornerstone: Berkshire Hathaway

The equity in question is, of course, Berkshire Hathaway. A name that, to the uninitiated, might evoke images of Victorian textiles. In truth, it is a conglomerate of such breadth and diversity that it resembles less a single enterprise than a miniature, self-contained economy. A peculiar entity, really, a corporation that appears to exist not to chase growth at any cost, but to simply… endure. It is, at present, the foundation’s largest holding, eclipsing even its stake in Microsoft by a considerable margin.

Loading widget...

Mr. Buffett, in recent years, has engaged in a systematic repurchase of Berkshire’s own shares – a practice that, while seemingly straightforward, reveals a subtle understanding of value. Some seventy billion dollars was allocated to this purpose between 2020 and 2024, a clear signal that he believed the market had, for a time, undervalued his creation. The cessation of these repurchases, however, is perhaps more telling. Not a lack of funds, one suspects, but a reluctance to overpay, a refusal to chase a fleeting advantage.

A Business Unlike Any Other

To describe Berkshire Hathaway as simply a ‘stock’ is to fundamentally misunderstand its nature. It is not a company defined by a single product or service, but by a collection of wholly-owned businesses – insurance (GEICO), railroads (BNSF), energy, manufacturing, retail – all operating with a remarkable degree of autonomy. To this is added a portfolio of public equities – Apple, American Express, Coca-Cola – the anchors of a vast, diversified holding. It is, in essence, a fund managed with the deliberate pace of a seasoned gardener, tending to a carefully cultivated landscape.

The Accumulation of Capital

And then, of course, there is the cash. A staggering three hundred and eighty-two billion dollars in liquid assets. A sum that, to some, appears excessive, even wasteful. But to view it thus is to miss the point. It is not merely a hoard, but a reservoir of potential, a means of seizing opportunity when others are forced to retreat. A war chest, if you will, accumulated through decades of prudent investment and patient accumulation.

The aftermath of the 2007-2009 financial crisis provides a clear illustration. While others panicked, Berkshire moved decisively, investing in institutions like Goldman Sachs and Bank of America, not merely to rescue them, but to secure a favorable return. The profits were considerable – over three billion dollars from Goldman Sachs, twelve billion from Bank of America – a testament to the power of contrarian investing and the rewards of acting when others are paralyzed by fear.

The Succession

The inevitable question, of course, is what will happen when Mr. Buffett is no longer at the helm. He remains chairman, but has designated Greg Abel as his successor. The transition has been years in the making, with Mr. Abel already overseeing Berkshire’s energy and utility businesses. The company’s decentralized structure – a network of independent subsidiaries – is designed to withstand the departure of any single individual. Mr. Buffett has built Berkshire to endure, and the market, thus far, appears to share that belief.

A Legacy of Value

Some will point to Berkshire’s recent underperformance, and that is a fair observation. But to focus solely on short-term returns is to miss the larger picture. Berkshire is not a vehicle for explosive growth, but a hedge against volatility, a means of balancing a portfolio that may be heavily weighted towards technology. When the market inevitably corrects itself, Berkshire will be well-positioned to capitalize on the resulting opportunities, just as it did in 2008.

It is, therefore, no surprise that it remains a core holding of the Gates Foundation. Berkshire is not flashy, and it will not deliver the instant gratification that many investors crave. But it is a long-term wealth builder, a source of stability in a turbulent world, and a comforting presence in a portfolio that might otherwise be dominated by the ephemeral allure of the new.

Read More

2026-02-20 12:33