Berkshire’s Future: A Skeptic’s Appraisal

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They say Berkshire Hathaway has beaten the market. Six million percent, the numbers scream. Which, honestly, feels less like financial acumen and more like a rounding error in the universe. My grandmother used to claim she’d predicted the ’87 crash by the unusual behavior of her parakeet. Same energy. It’s easy to look good when you start from almost nothing. Try compounding returns on a trillion dollars. It’s like trying to turn a cruise ship with a canoe paddle.

Buffett, bless his heart, admitted as much. And now Greg Abel is at the helm. A perfectly nice man, I’m sure. I once spent an entire flight next to someone who managed a mid-sized paperclip factory, and he seemed equally competent. The question isn’t competence, it’s scale. It’s the quiet desperation of having so much money that even good investments feel… underwhelming.

Everyone’s worried about GEICO. And rightly so. It’s always the things you ignore that come back to haunt you. Like that chipped mug in the cupboard. You keep meaning to replace it, but then you’re running late for a meeting and, well, it’s just a mug. GEICO is a mug. A very large, very expensive mug that’s losing market share to Progressive. They’re all so… cheerful. The Progressive commercials. It feels vaguely aggressive. My aunt Mildred prefers them. She also collects porcelain thimbles.

They’ve got almost $400 billion in cash. It’s a fortress of liquidity. A perfectly polished, utterly useless fortress. It earns something, I suppose, in Treasuries. But it’s like having a spare bedroom you’re too polite to rent out. You just fill it with dusty antiques and pretend it doesn’t exist.

So, can they beat the market? Honestly, I doubt it. But that’s not the interesting part. The interesting part is watching them try. Watching a behemoth attempt to be nimble. It’s like watching a walrus attempt ballet. There’s a certain tragic beauty to it.

The Insurance Problem

GEICO. It keeps coming back to GEICO. My brother-in-law recently switched, lured by a slightly lower premium. He’s a spreadsheet person. Everything is a calculation. He doesn’t understand the emotional weight of brand loyalty. Or the subtle art of procrastination. He’s a very difficult man to shop for.

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Deploy the Cash (Please)

They need to spend the money. Throw it at something. Anything. I once spent $300 on a vintage cheese grater. It didn’t grate cheese any better, but it looked good on the counter. Abel needs to find his cheese grater. Something that sparks joy, or at least justifies the expense.

Buybacks (With Discernment)

Buffett paused the buybacks. Smart man. Sometimes the best investment is simply not losing money. But Abel should revisit the idea. Not a mindless repurchase program, but a strategic one. Buybacks at a discount, as Buffett insisted. It’s like finding a perfectly good sweater on sale. You can’t resist.

Modernize the Portfolio

Amazon. They bought a little bit of Amazon. A tiny, almost apologetic investment. It paid off, of course. Everything pays off eventually. But it highlights the problem. Buffett isn’t a tech guy. He understands railroads and insurance. He doesn’t understand algorithms and disruption. It’s not a criticism. It’s just a fact. Abel and Weschler need to fill that gap. They need to embrace the future, even if it scares them.

I suspect they’ll mostly buy more of the things they already understand. Which is fine. There’s comfort in familiarity. But sometimes, you have to take a risk. You have to buy the weird, untested thing. You have to buy the cheese grater.

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2026-02-25 15:32