Originally Posted by
Azz
First of all, there are two separate things here.
1) Berkshire has been a wonderful investment for a very long time. I have no issue with this at all; I mean, the Buffett "magic formula" is the reason for this success, and that is to be commended as it has provided very good - and consistent - shareholder return. But that magic formula is something only the very rich can utilize, and Buffett has deliberately implied over decades that he's just a "value" investor - and it's total BS, let's get to point 2).
2) Berkshire and Buffett have for decades had the ability to gerrymander share purchases via two mechanisms not available to regular investors. They are buying preferred stock and placing cronies onto boards. He reduces risk significantly by moving up the queue with preferred stock if there's a problem with a company he has bought into, and the board representation significantly reduces the possibility of problems arising is the first place. Neither of these things are available to your average punter, such as the deluded "value"-type investors you see on this website, who believe that "future discounted blah blah blah" means they're onto a winner and given enough time and patience they'll be in the money. But it's a fantasy; they have no clue what's going on at the company and are subject to the whims of market price for their shares which will likely have value nothing close to whatever fantasy-land value they think it should be. And the common stock they own means when it does go very bad they'll have a pile of shares worth zero.