“When it comes to generating good returns, the most important thing is quality.” - Terry Smith
New York, NY
Joined October 2013
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Been thinking about this line from Clayton Christensen a lot in regards to $GOOGL ….
Am I being patient or lazy? It’s a critical distinction, but it’s often hard to tell.
The most expensive urge in investing
Investing may be one of the only things in life where trying to be productive can actually make you poorer. In business, more effort usually helps. You make more calls, build more, solve more problems and improve the outcome. In investing, every extra decision gives you another chance to screw up something that was already working.
That is why doing nothing feels so uncomfortable. Your stock goes nowhere for a year or two, another company doubles and someone on X is bragging about the next great idea. Suddenly patience starts to feel like laziness and activity starts to feel like intelligence.
A great business does not care that you are bored. It keeps adding customers, improving margins, expanding distribution, strengthening its moat and reinvesting cash. The business can be making enormous progress while the stock price appears to be doing absolutely nothing. That disconnect is where a lot of investors get themselves into trouble.
They start judging the speed of the business by the speed of the stock. But the market gives you a new price every second while a business creates value over time. Those are two completely different clocks, and when you confuse them, you start making short term decisions about long term assets.
You trim because the stock ran too far or you sell because nothing has happened lately. You rotate because something else looks more exciting. Sometimes you tell yourself you are improving the portfolio when really you are just satisfying your need to do something.
Every one of those decisions has a cost. Taxes, mistiming, lost conviction and the possibility that the wonderful business you sold keeps compounding without you. This does not mean never sell. It means selling should require evidence, not emotion.
If the moat weakens, management starts destroying capital, the economics deteriorate or the long term destination changes, then the thesis may have changed. But boredom is not a broken thesis, volatility is not a broken thesis, or something else getting rich faster is definitely not a broken thesis.
One of the hardest lessons in investing is realizing that inactivity is not the absence of a decision. Sometimes inactivity is the decision. You already did the hard work by finding the business, understanding the economics and buying it at a price you could live with. Now the challenge is not getting in your own way.
A lot of investors spend years searching for an extraordinary company and then destroy the result because they cannot tolerate an ordinary stretch of time. The business may need 10 years to become exceptional while the investor needs stimulation every 10 days. That is one of the great ironies of investing. The company is compounding while the investor is getting impatient.
The market makes this harder because it gives you prices every second, headlines every hour and thousands of other stocks constantly begging for your attention. Compounding needs almost none of that. It needs a great business, enough time and an investor capable of leaving the two alone together. Sometimes the smartest thing you can do is simply stop touching it.
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Devin Haran retweeted
Warren Buffett: "If you owned the best auto dealership in town — with the best brand and you had somebody good running it — you wouldn't drop by every day and say, 'How many people have come in today?' or 'I think interest rates are going up a little, maybe that will slow down our sales.'"
"You buy it knowing there's 365 days a year and you're going to own it for 20 years, so that's 7,300 days — so you know things are going to be different from day to day and year to year."
"You shouldn't buy it if the day-to-day stuff is important."
Devin Haran retweeted
Munger: "I don’t go to meetings. Warren doesn’t go to meetings. Put that in your article: There’s practically no meetings in the whole Berkshire culture. There are a few telephone calls and no meetings. I don’t care if you print this. Warren gets a headache if he’s in a big meeting where a lot of other people are saying dumb things. He gets a sick headache. He’s not feigning it. He actually does."
(WSJ - "Charlie Munger, Unplugged" - 2019 wsj.com/articles/charlie-mun…)
Devin Haran retweeted
Chris Hohn on what makes a good investor.
"I was always willing to look at the company fundamentals and not try to guess the stock market. I was always fundamental."
"Most investors are not fundamental. They trade actively. They look at data points. They say, 'What's the catalyst?' They don't really know what the company does."
"Long-termism is key."
Devin Haran retweeted
This is a great visualization of what investing should look like.
Lots of learning, reading, networking, thinking, all of which looks like “doing nothing” because you’re not buying or selling.
Then, when the prepared mind meets the opportunity, you attack with ferocity.
“The catastrophic mistake is not slightly overpaying for greatness. It is refusing greatness because the price wasn’t perfect — and deploying that capital into something mediocre instead.”
In 2009, Nick Sleep wrote a passage about Walmart that should permanently influence how you think about valuation.
He showed that an investor in 1972 could have paid over 150x the prevailing share price — a P/E above 1,500 — and still earned a 10% annual return through to the time he wrote the letter. Even buying ten years later at over 200x earnings would have delivered the same result.
𝐒𝐥𝐞𝐞𝐩 𝐭𝐡𝐞𝐧 𝐚𝐬𝐤𝐞𝐝 𝐭𝐡𝐞 𝐪𝐮𝐞𝐬𝐭𝐢𝐨𝐧 𝐭𝐡𝐚𝐭 𝐦𝐚𝐭𝐭𝐞𝐫𝐬 𝐦𝐨𝐬𝐭:
“𝐓𝐡𝐞 𝐦𝐚𝐫𝐤𝐞𝐭 𝐬𝐭𝐫𝐮𝐠𝐠𝐥𝐞𝐝 𝐭𝐨 𝐚𝐩𝐩𝐫𝐞𝐜𝐢𝐚𝐭𝐞 𝐭𝐡𝐞 𝐦𝐚𝐠𝐧𝐢𝐭𝐮𝐝𝐞 𝐚𝐧𝐝 𝐥𝐨𝐧𝐠𝐞𝐯𝐢𝐭𝐲 𝐨𝐟 𝐭𝐡𝐞 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬’ 𝐬𝐮𝐜𝐜𝐞𝐬𝐬. 𝐁𝐮𝐭 𝐰𝐡𝐲?”
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𝐋𝐞𝐬𝐬𝐨𝐧 𝐎𝐧𝐞: 𝐈𝐭 𝐢𝐬 𝐛𝐞𝐭𝐭𝐞𝐫 𝐭𝐨 𝐛𝐞 𝐚𝐩𝐩𝐫𝐨𝐱𝐢𝐦𝐚𝐭𝐞𝐥𝐲 𝐫𝐢𝐠𝐡𝐭 𝐭𝐡𝐚𝐧 𝐩𝐫𝐞𝐜𝐢𝐬𝐞𝐥𝐲 𝐰𝐫𝐨𝐧𝐠 (John Maynard Keynes).
The investors who passed on Walmart because it looked “too expensive” were precisely wrong. The ones who paid up — even substantially — and focused on the 𝘲𝘶𝘢𝘭𝘪𝘵𝘺 𝘢𝘯𝘥 𝘭𝘰𝘯𝘨𝘦𝘷𝘪𝘵𝘺 of the business were approximately right.
When you own a truly exceptional business with decades of runway, whether you overpaid by 5% or 10% barely registers over a 10- or 20-year holding period.
The catastrophic mistake is not slightly overpaying for greatness. It is refusing greatness because the price wasn’t perfect — and deploying that capital into something mediocre instead.
𝐋𝐞𝐬𝐬𝐨𝐧 𝐓𝐰𝐨: 𝐅𝐨𝐜𝐮𝐬 𝐨𝐧 𝐭𝐡𝐞 𝐦𝐨𝐬𝐭 𝐢𝐦𝐩𝐚𝐜𝐭𝐟𝐮𝐥 𝐝𝐫𝐢𝐯𝐞𝐫𝐬, 𝐧𝐨𝐭 𝐣𝐮𝐬𝐭 𝐭𝐡𝐞 𝐬𝐮𝐫𝐟𝐚𝐜𝐞-𝐥𝐞𝐯𝐞𝐥 𝐝𝐚𝐭𝐚.
Sleep’s answer was clear. 𝘛𝘩𝘦 𝘤𝘦𝘯𝘵𝘳𝘢𝘭 𝘦𝘯𝘨𝘪𝘯𝘦 𝘰𝘧 𝘞𝘢𝘭𝘮𝘢𝘳𝘵’𝘴 𝘴𝘶𝘤𝘤𝘦𝘴𝘴 was a thrift orientation that fueled growth by consistently sharing savings with customers. The culture reinforced this behavior, creating a self-reinforcing loop. This was the deep, permanent reality of the business.
𝘠𝘦𝘵 𝘪𝘯𝘷𝘦𝘴𝘵𝘰𝘳𝘴 𝘱𝘭𝘢𝘤𝘦𝘥 𝘵𝘰𝘰 𝘮𝘶𝘤𝘩 𝘦𝘮𝘱𝘩𝘢𝘴𝘪𝘴 𝘰𝘯 𝘵𝘳𝘢𝘯𝘴𝘪𝘵𝘰𝘳𝘺 𝘧𝘢𝘤𝘵𝘰𝘳𝘴 — valuation heuristics, margin trends, and incremental growth rates — while underweighting the engine that actually mattered. These surface-level metrics are anecdotal and short-lived.
The deep reality of how a business truly compounds is what deserves the greatest weight in the minds of long-term investors.
𝐋𝐞𝐬𝐬𝐨𝐧 𝐓𝐡𝐫𝐞𝐞: 𝐓𝐡𝐞𝐬𝐞 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐦𝐨𝐝𝐞𝐥𝐬 𝐚𝐫𝐞 𝐞𝐱𝐭𝐫𝐞𝐦𝐞𝐥𝐲 𝐫𝐚𝐫𝐞 — 𝐚𝐧𝐝 𝐬𝐡𝐨𝐮𝐥𝐝 𝐧𝐨𝐭 𝐛𝐞 𝐭𝐚𝐤𝐞𝐧 𝐟𝐨𝐫 𝐠𝐫𝐚𝐧𝐭𝐞𝐝.
There are very few business models where growth begets growth in the way Walmart (or Amazon / Costco) has grown. In many companies, size eventually becomes a burden.
𝘉𝘶𝘵 𝘪𝘯 𝘴𝘰𝘮𝘦 𝘤𝘢𝘴𝘦𝘴, 𝘴𝘤𝘢𝘭𝘦 𝘵𝘶𝘳𝘯𝘴 𝘪𝘯𝘵𝘰 𝘢𝘯 𝘢𝘴𝘴𝘦𝘵. 𝘌𝘷𝘦𝘳𝘺 𝘪𝘯𝘤𝘳𝘦𝘮𝘦𝘯𝘵 𝘰𝘧 𝘨𝘳𝘰𝘸𝘵𝘩 𝘴𝘵𝘳𝘦𝘯𝘨𝘵𝘩𝘦𝘯𝘴 𝘵𝘩𝘦 𝘤𝘶𝘴𝘵𝘰𝘮𝘦𝘳 𝘱𝘳𝘰𝘱𝘰𝘴𝘪𝘵𝘪𝘰𝘯, 𝘸𝘩𝘪𝘤𝘩 𝘥𝘳𝘪𝘷𝘦𝘴 𝘮𝘰𝘳𝘦 𝘴𝘤𝘢𝘭𝘦, 𝘸𝘩𝘪𝘤𝘩 𝘴𝘵𝘳𝘦𝘯𝘨𝘵𝘩𝘦𝘯𝘴 𝘪𝘵 𝘧𝘶𝘳𝘵𝘩𝘦𝘳.
MercadoLibre is one of the clearest modern examples. Its five-pillar flywheel — marketplace, advertising, payments, logistics, and credit — reinforces itself daily. More buyers attract more sellers. More transactions generate better data. Better data improves credit decisions. Superior logistics deepens loyalty. A larger audience and decades of rich data makes advertising more valuable. This is scale economies shared in action with magnitude and longevity.
That engine is why MercadoLibre has grown revenue more than 30% year-over-year for 29 consecutive quarters. A business model where growth begets growth — a rate and valuable structure in investing.
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$MELI $AMZN $WMT
*This post is not to say that valuation doesn’t matter at all. Severely overpaying can undo years of strong business performance. However, the greater mistake is placing 𝘵𝘰𝘰 𝘮𝘶𝘤𝘩 weight on near-term metrics and entry price while underweighting the quality and durability of the business itself. It’s important to see the forest, not just the trees.
“You do not need to predict recessions, elections, interest rates or tomorrow’s headlines with perfect accuracy. You simply need to consistently buy wonderful businesses at sensible prices, avoid permanent mistakes and allow time to do most of the heavy lifting.”
The myth of luck
People love talking about luck. Someone builds a billion dollar company and they were “lucky.” Someone bought the right stock at the right time and they were “lucky.” Someone met the love of their life by chance and they were “lucky.” Looking backward, life often appears random. Looking closer and thinking deeply, it usually isn’t.
What we call luck is often the delayed byproduct of consistently putting yourself in good positions. It has far less to do with predicting exactly what will happen and far more to do with making decisions that slowly improve the odds in your favor. Most people don’t notice this because the compounding is invisible while it is happening. By the time the outcome finally arrives, the years of preparation have been forgotten.
One of the biggest mistakes people make is believing life is a game of certainty. They spend their time asking whether something will happen instead of asking whether they are positioned if it does happen. Great investors, entrepreneurs, athletes and leaders understand this difference. They know they cannot control the future, but they can absolutely control how prepared they are for it.
Every decision changes the probability distribution of your future. Reading one more book probably won’t change your life. Neither will one workout, one conversation, one dollar invested or one networking event. The power comes from stacking those decisions year after year until the probabilities begin to heavily favor you. Eventually people call the outcome luck because they never saw the thousands of small decisions that produced it.
This is why people constantly confuse the harvest with the seed. They celebrate the company after it becomes worth billions but ignore the decade spent learning, failing, reading, improving and taking intelligent risks. They admire the investor after the stock has increased tenfold but rarely appreciate the thousands of hours spent studying businesses before making the investment. The harvest is obvious, but seeds were buried underground where nobody was paying attention.
The fascinating thing about life is that good decisions do more than increase your odds. They create optionality. Every dollar you save gives you another opportunity you can say yes to. Every relationship you build opens another door. Every skill you develop creates possibilities that simply did not exist before. Wealth is not just money. Wealth is having choices when opportunity finally knocks. Luck is when opportunity meets preparation.
Looking backward, these moments seem almost inevitable. Looking forward, they are almost impossible to identify. Nobody knows which book will change the way they think forever, which conversation will lead to a business partnership or which investment will transform their financial future. The goal is not to predict the exact opportunity. The goal is to keep putting yourself in positions where opportunities are more likely to find you.
One of the reasons I love investing is because it constantly reinforces this lesson. You do not need to predict recessions, elections, interest rates or tomorrow’s headlines with perfect accuracy. You simply need to consistently buy wonderful businesses at sensible prices, avoid permanent mistakes and allow time to do most of the heavy lifting. Positioning is usually far more valuable than prediction.
The same principle applies almost everywhere else in life. Healthy people are rarely transformed by one workout. Great marriages are rarely built because of one romantic vacation. Exceptional careers are rarely created because of one brilliant meeting. Extraordinary lives are usually nothing more than ordinary decisions compounded for an extraordinarily long period of time.
1/2 👇
Devin Haran retweeted
Berkshire Hathaway director Chris Davis: "An investor should recognize that the biggest threat to their generating a return over time is their own behavior."
"If somebody has the mindset of 'when stocks go up, I get excited and want to get in' [or] 'when they go down, I want to get out' — that behavior penalty will swamp any other choices they make."
Devin Haran retweeted
One thing I’ve noticed over the years is that a lot of companies look completely unstoppable for a period of time, perhaps a few years, before eventually slowing down much more than investors ever imagined possible. The revenue explodes, margins improve, every quarter looks incredible, the stock keeps increasing, and after a while people start believing the company is somehow different from every other business that came before it.
But growth gets exponentially harder at scale and I do not think most investors fully appreciate this while it is happening. Growing 30% on $500m of revenue is one thing. Growing 30% on $2b is an entirely different challenge and growing 30% on $6b is even more different because now the company needs billions of incremental revenue every single year just to maintain the same growth rate. The larger the business becomes, the harder the math becomes underneath the surface.
At smaller scale, growth can come from almost anywhere. More distribution, new geographies, favorable industry conditions, market share gains, adjacent products, early adopters, stronger brand awareness, and a few things going right can create explosive growth because the revenue base is still relatively small. But eventually the easy growth disappears and the business suddenly requires much stronger execution just to maintain the same trajectory it once achieved much more effortlessly.
Competition reacts, saturation appears, expectations become much harder to satisfy, and management teams start making mistakes because they begin operating as if the earlier growth rate is permanent. That is usually when empire building starts appearing, acquisitions become more aggressive, costs rise too quickly, and capital allocation begins deteriorating even while reported numbers may still look “good.”
What makes this difficult is that the narrative usually feels strongest right before growth actually starts slowing. Investors begin extrapolating relatively temporary momentum far into the future because the previous few years looked extraordinary, and the stock often gets valued as if the recent growth rate has become permanent. Ironically, the moment investors feel the most confident is often the moment the future is becoming the least predictable.
You saw this with $CSCO, $PTON, $ZM, $BYND, $GPRO and countless other companies that at one point looked like they were taking over the world before reality eventually caught up to expectations. Even many elite businesses went through long periods where investors believed the growth story was permanently broken. There were periods where people thought $SBUX had overexpanded, $GOOG had matured too much, $AMZN had become too large to continue compounding, and $WMT best growth years were behind it.
That is what makes investing difficult because the stock often peaks long before the business peaks. Markets price expectations, not current numbers, which means a company can still report strong results while the stock collapses because expectations had detached too far from reality years earlier.
I think one of the biggest mistakes investors make is spending all their time studying fast growers instead of studying what actually happens after companies become large. That is usually where the real lesson is because very few businesses successfully navigate multiple decades of high growth while still maintaining strong returns on capital after the easy growth eventually disappears.
The difficult part is not finding companies growing fast today because there will always be companies growing fast. The difficult part is figuring out which businesses will still be larger, stronger, more relevant and competitively dominant 10 years from now after the easy growth is already gone.
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Devin Haran retweeted
Chris Hohn did a 90-minute sit-down with Nicolai Tangen and then dropped an investor letter the FT got hold of last week.
You’d think the guy who printed a record $18.9B last year would be doing victory laps. Instead he’s quietly rewiring his whole portfolio.
My favorite takes from both:
1.The most important thing in investing isn’t growth. It’s barriers to entry. Growth without a moat is the airline industry: 5% volume growth for 100 years and basically zero cumulative profit.
2.There are only about 200 companies on earth he considers high-quality and investable. His fund holds 15.
3.Average holding period: 8 years. Some positions 13. “You have to hold the company forever, because the stock market may be at very bad prices when you want to sell.”
4.His real test for a moat: can the company price above inflation? A 20% margin business that prices 1% above inflation grows profits 5% faster than revenue. Forever. Almost no companies can do this.
5. Industries he won’t touch: banks, autos, retail, insurance, tobacco, asset managers, fossil fuel utilities, airlines, wireless telecom, media, advertising. On banks: “sooner or later someone without a lot of intelligence comes to run them, and then it can be toxic.”
6.On AI generally: call centers go bankrupt. Indian outsourcing coders are next. But for everyone else, AI lowers costs and raises productivity. Companies with real moats become MORE valuable.
7. Here’s the punchline. The FT got hold of his investor letter. He cut his Microsoft stake from 10% of the fund to 1%. Roughly $8B sold. He’d held it since 2017 through a 400% rally. His reason: AI could disrupt Office and Azure faster than the market thinks.
8.He moved that capital into Alphabet. Doubled it from 3% to 5%. Now his largest tech position. The world’s best quality investor sold Microsoft and bought Google because he thinks Google’s moat is more durable in an AI world. Not the consensus trade.
9.The underlying thesis: “AI eats software.” If AI agents do the work humans used to pay per-seat SaaS licenses for, the whole SaaS model gets re-rated. Oracle, Adobe, Salesforce all ~40% off highs. Microsoft 25% off. Market is starting to agree.
10.When to sell? Not when something gets expensive. When conviction drops. Valuation is one variable, conviction is the other. What kills you isn’t being wrong, it’s permanent loss of capital.
11.He admits hardcore activism doesn’t work anymore. Too much of the shareholder base is passive index funds. And even when activism wins, you usually win in a bad business. “The business always wins.”
12.Counterintuitive take: there are more good companies in public markets than in private equity. The best businesses are too big for PE to buy. And when public companies sell something to PE, they’re selling the assets they want to get rid of.
13.On intuition: “thinking without thinking.” Pattern recognition from 20 years of reps. It’s how he sniffed out Wirecard while the German establishment was defending it. “Most investors trust authority too much.”
14.He basically stopped shorting. “You’re going to be eventually right but not be able to fund the losses.” The first guy to short Wirecard had to cover 19 years before it hit zero. Buffett told him he and Charlie studied shorting and concluded it was too hard.
15.He gives almost everything away. ~$500M a year. $10 prevents an unwanted pregnancy in Africa. $40 saves a child from severe malnutrition. $50 prevents permanent blindness.
16.Tangen asks: advice to young people? Hohn, who runs the world’s most profitable hedge fund: “Go on a spiritual path.” The guy who made $18.9B last year ends the interview saying only purpose and meaning matter.
The headline: the world’s best quality investor just sold his biggest tech compounder because he thinks AI is breaking the moat. Quietly, with conviction, on an 8-year horizon, while everyone else is still buying the AI winners of 2023.
Devin Haran retweeted
One thing nobody really talks about in distressed investing, A/R recoveries, and bankruptcy claims is that secured vs unsecured only tells you so much. Technically it matters, obviously. But in practice not really. A lot of the time recoveries come down to how important you are to the debtor.
How embedded are you? How hard are you to replace? How much pain would switching vendors / software / suppliers cause?
A couple times a year I run into a unsecured creditor that, on paper, should probably be getting close to zero… and somehow they end up at or near 100% recovery. Why? Because they built their business properly. They made themselves critical to the ecosystem around them.
To me, that’s one of the biggest signs of a great business. Not just high margins or growth - but being so integrated that even in distress situations people need to keep you alive and pay you.
Whenever I see businesses like this I always try to stay in touch with the owners in case they ever want to sell. Honestly you could build a Berkshire-style holdco just buying companies like this over time.
Devin Haran retweeted
“Chris has an incredible ability to think in black and white. He focuses on one, maybe two things that drive the investment thesis and then has the confidence to scale up the bet so it’s a big part of the fund.”
Is Chris Hohn Britain’s answer to Warren Buffett? ft.trib.al/RIqPkIY
Devin Haran retweeted
Society is full of little, insidious mechanisms trying to capture and divide your energy and focus
This is completely against your own self-interest, but from this discourse this weekend on unhappiness in the face of abundance it should be fully evident that people are almost powerless to resist these forces
This is because the smartest people in the world are hard at work creating novel approaches to highjack your attention, degrade your willpower and convince you to trade your money and your time for the next _____ which will surely, finally, bring your happiness
But success, and contentedness, come from investing in *fewer* pursuits with *more* depth and intensity
You only need a few great friends who you can count on and who can count on you. A couple of hobbies you are willing to be bad at for years until you slowly live your way into well-crafted mastery. Your career will flourish if you embrace the dogged pursuit of a single outcome over a long period of time
This is the tension of modern existence, and the true meta-skill to hone and refine over decades. How do you live a deliberate life in a world that actively wants you to exist in a state of reactive desire?
I don’t claim to have the answer, and would simply posit this:
Become aware of all the ways society, and people, try to hijack your one precious life to divert attention toward things that really and truly do not matter, and even actively harm you
And every day seek to build mental and emotional resilience against those forces and cultivate persistence in your pursuit of the few things that really and truly matter
It is hard. Many days you will fail. But you cannot let the world knock you off balance and live a life defined by someone else’s terms
It is perhaps the only thing that matters
Devin Haran retweeted
My thoughts on $BRK
People overcomplicate $BRK because they try to value every piece perfectly down to the decimal. They debate price to book, intrinsic value formulas, and build giant spreadsheets modeling every subsidiary. Meanwhile I look at it much more simply. $BRK has roughly $400b in cash and around $300b in stocks.
That’s about $700b right there between cash and equities alone. So when the company is worth around $1t, you’re basically paying roughly $300b for everything else. That includes the railroad, the energy business, insurance operations, manufacturing, distribution, service businesses, and one of the greatest collections of operating assets ever assembled.
And honestly I think people massively underestimate the value of the insurance float. The float is one of the greatest financial assets ever created because $BRK gets access to enormous amounts of capital at extremely attractive economics. Most people do not fully understand how powerful that becomes over decades. That float has quietly fueled one of the greatest compounding machines in financial history.
But the part that fascinates me most is the discipline. Almost every CEO on earth would have cracked by now sitting on $400b of cash. Most management teams would feel pressure to force acquisitions just to appear active. $BRK has basically said if we cannot find something intelligent to buy at scale, we are willing to wait.
People look at the cash and think it’s dead money, but optionality matters. $BRK effectively owns a giant call option on future chaos. When markets panic and liquidity disappears, $BRK becomes one of the only entities on earth capable of writing enormous checks instantly without relying on financing markets. That is a huge strategic advantage.
The other thing people miss is how rare true permanence is in capitalism. Most corporations optimize for optics. CEOs rotate, incentives change, cultures decay, and strategies constantly shift depending on sentiment. $BRK was built differently.
It was designed almost like an anti Wall Street structure where long term thinking itself became the competitive advantage. In many ways that culture may end up being Buffett’s greatest creation, even bigger than the stock portfolio itself. A lot of companies talk about long term thinking. $BRK actually structured the organization around it.
I also think people misunderstand what $BRK really is. They think it’s just “an insurance company that owns stocks.” But $BRK is basically a giant ecosystem of real world economic activity. Railroads, energy infrastructure, manufacturing, freight movement, insurance, distribution, consumer spending, and financial assets all under one umbrella.
In many ways it’s almost like owning a miniature version of the American economy. But unlike an index fund, the capital allocation is centralized under highly disciplined operators. You get diversification without complete chaos along with durability, liquidity, tax efficiency, reinvestment flexibility, and world class balance sheet.
And honestly the most underrated asset may simply be trust. If $BRK calls during a crisis, people pick up the phone. If $BRK wants to buy a family owned business, sellers trust the company will preserve the culture and operate responsibly.
I also think people are underestimating Greg Abel. Nobody is Warren Buffett and nobody ever will be, but that doesn’t mean $BRK suddenly stops being $BRK. Greg already understands the culture, operational discipline, and capital allocation philosophy better than almost anyone alive.
That’s why $BRK almost a forever asset or a savings account on steroids. No, it’s not going to triple overnight and no, it’s not some hyper growth AI stock. But when I look at over $700b between cash and equities, elite operating businesses, insurance float, fortress balance sheet strength, world class reputation, and disciplined reinvestment talent, I have a hard time viewing it as expensive.
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Devin Haran retweeted
During my interview with @DrewCohenMoney, we talked about something most investors don’t want to admit. Truly great deals are rare, and far rarer than people think.
I gave him a simple example. If we walked around San Francisco looking for an incredible real estate deal, something you’d actually want to own for years and feel confident putting serious money into, we probably wouldn’t find one. Not quickly, not easily, and probably not for a long time.
Now imagine someone told you they find a deal like that every single week or month. You wouldn’t think they’re brilliant. You’d assume they don’t actually know what a great deal is. That same logic applies to the stock market, but people forget it the moment a ticker is involved.
Part of the problem is the system itself. Everything around you is designed to push activity. Brokers make money when you trade, media gets paid when you pay attention, and online everyone grows by constantly having something new to say. No one gets rewarded for sitting still and none of that good feeling dopamine gets released into your brain.
But in investing, sitting still is often the job. The best investors are not the ones doing the most. They are the ones filtering the hardest. They are willing to look at a hundred ideas and reject ninety nine without hesitation, because they understand that truly great opportunities are rare.
There’s also a cost people don’t talk about. It’s not just losing money, it’s wasting attention. Every hour you spend digging into an average business is an hour you’re not sharpening your thinking or recognizing something truly exceptional when it finally shows up. Attention, not capital, is the real constraint.
The hard part is that doing nothing feels wrong. You see others constantly trading, posting wins, talking about opportunities, and it creates this quiet pressure that you’re falling behind. So people lower their standards without realizing it. They stop asking whether something is truly great and start asking whether it’s good enough to act on because they can make some money perhaps.
That’s where most mistakes come from. A simple way to think about it is this. If you wouldn’t be excited to put a meaningful portion of your net worth into a business and hold it for years, it’s probably not one of those rare opportunities.
That doesn’t mean you’ll only find one idea every five years like Warren Buffett has suggested, but the number is still very small. In most years, finding one or two truly great opportunities is an exceptional outcome. Some years you’ll find more, some years none, but that’s just the nature of the game. The goal isn’t to always be active, it’s to become so selective that almost nothing qualifies.
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Ajit Jain:
“Insurance, much like investing, is a game that requires patience,” Jain said on Saturday. “It is very difficult to get people to sit back and do nothing. Every now and then you will come across a deal that will hit you with a two-by-four and it will be screaming ‘money’. That’s when you come to me and we’ll make a decision whether to do it or not.”
Devin Haran retweeted
Howard Marks on holding onto winners in your stock portfolio
From his recent interview at Wharton
"Buffett says he made all of his money on 12 ideas. Guy invested for 70 years and said he made all his money on 12 ideas. Charlie Munger used to say he made all his money on 4 ideas. He didn't have as many good ideas as Warren"
This is the right way to approach executive comp/incentives. Doesn’t have to be all of their take-home pay, but it should be a big % of the after-tax amount each year.
Only way to truly align interests w principals is for agents to actually BECOME principals of their own accord.
Greg Abel on CNBC: Greg is investing $15.3 million in Berkshire A shares, his entire Berkshire salary after taxes for 2026. He pledges to do the same every year going forward.
Devin Haran retweeted
Warren Buffett retires today, most likely in his mind at the closing bell, just minutes from now.
Congratulations to the greatest investor the world will ever know. The returns speak for themselves - Berkshire earned 6,118,651% or 19.9% annually over his 60 years running the company. The S&P 500 returned 46,491%, or 10.4%. Berkshire’s shares could decline by 99.2% and still have outperformed the market. The record is even greater when including the partnerships he ran through 1969.
However, it is not the returns but the way Warren did it that matters most; with integrity and morality - and with humility and humor. He didn’t have to teach, but he did. On behalf of so many of us, thank you, sir.
