The primary weakness in BRK is one stated by Buffett, that the company is already so large that finding new investments that move the needle is very difficult. BRK is the sixth largest holding in SPY.
Buffett makes sense on many things, including on this point.
For which is it harder to “move the needle”: Berkshire Hathaway…or the S/P 500…or the entire economy?
The primary weakness in BRK is one stated by Buffett, that the company is already so large that finding new investments that move the needle is very difficult. BRK is the sixth largest holding in SPY.
I agree that that is the biggest weakness when considering the chances of not outperforming the average firm.
But the most important weakness of any firm for an investor is investment risk: the chance of a material permanent loss of capital.
In my own view, which others may not share, by far Berkshire’s largest risk of permanent loss of capital is US government action / jurisdiction risk.
If the company or one of its major units were to become a punching bag for some reason, something
big and bad might happen, initiated either within the political system or the judicial system.
The accepted rules existing to date might not be able to prevent that–the past is not a reliable guide.
And of course the vast majority of the company’s eggs are in the US basket, a closely related risk.
Apple’s exposure to China is also immense, for both production and sales.
But that risk is capped as a fraction of Berkshire’s business and entirely isolated from Berkshire’s balance sheet.
We can put a known cap on how bad that could be, and we know in advance that Berkshire could survive it.
Jim