The whole idea that BH is a success due to good deals is wrong. BH has made good deals and bad deals, but that's not the main reason for their long term track record.
BH has a good record because they have structured their business to have a permanent edge: Their insurance&reinsurance business (half of the business) generates cash and float constantly. The side of the company seeks ways to invest all that cash. Often buying whole businesses.
In other words, BH cuts out several levels of middlemen. They are an insurance company, holding company, private equity & alternative investment management company and investment fund rolled into one. Cutting out banks, private equity, fund managers bring in huge savings.
The reason why BH has not been outperforming SP500 in the last 10 years is that cash is cheap for everyone (this is the longest boom in history) Once the water level drops again and we see who swims naked, BH will outperform again.
BH has a good record because they have structured their business to have a permanent edge: Their insurance&reinsurance business (half of the business) generates cash and float constantly. The side of the company seeks ways to invest all that cash. Often buying whole businesses.
In other words, BH cuts out several levels of middlemen. They are an insurance company, holding company, private equity & alternative investment management company and investment fund rolled into one. Cutting out banks, private equity, fund managers bring in huge savings.
The reason why BH has not been outperforming SP500 in the last 10 years is that cash is cheap for everyone (this is the longest boom in history) Once the water level drops again and we see who swims naked, BH will outperform again.