Berkshire vs. S&P Performance Puzzle

Adam Mead is a professional investor, CEO of Mead Capital Management, and author of the 850-page second edition of The Complete Financial History of Berkshire Hathaway — one of the most exhaustive chronicles of Warren Buffett’s conglomerate ever written.

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3:00 – Adam explains why a second edition was necessary: the pandemic, Apple’s rise to 50% of the portfolio, Allegheny and Pilot acquisitions, Japanese trading houses, losing Charlie Munger, and Buffett’s retirement

5:58 – Berkshire’s underlying philosophy hasn’t changed — it’s the world that changed; living through history feels more intense than researching it on the page

8:25 – Why Buffett sold the airlines: as largest shareholder, Berkshire could have blocked bailout funds, putting the airlines’ survival at risk

11:28 – New investment cases rhyme with the past; patient capital allocation works; $72B in share repurchases between 2020–2024 was the real “elephant”

15:22 – Japanese trading houses financed with 1% yen-denominated debt — currency-insulated and opening future partnership opportunities

17:56 – The new chapters are Buffett’s final years; succession to Greg Abel was methodical, not sudden; Greg made material improvements visible in the financials

22:01 – Global expansion under Greg Abel could be Berkshire’s next chapter, following Fairfax’s playbook

23:50 – Sum of the parts walkthrough: $373B cash (~$320B deployable), $234B equities (after Apple adjustment and deferred taxes), BNSF $80-90B, BHE ~$70B, MSR businesses ~$205B, insurance underwriting ~$42.5B, minus $22.5B holding company debt = just over $1 trillion intrinsic value

44:41 – S&P underperformance is more about the index going “nuts” than Berkshire missing something

48:47 – Cash buildup is confluence, not structural: Apple gains, expensive market, Berkshire shares at/above intrinsic value — like a water balloon filling up

56:41 – Berkshire’s edge: de-emphasize information, emphasize continual learning, patience, and underappreciated liability management

1:00:54 – AI won’t replace conviction; if it could be done by clicking a button, the advantage negates itself

1:10:15 – Conviction requires deep work; shallow roots won’t hold through volatility

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