Buffett's paradox of scale
The world's biggest investors like Warren Buffett know they have to make big bets to move the needle. But what to do when investment opportunities at that scale are few and far between?
Warren Buffett’s first annual Berkshire Hathaway newsletter without Charlie Munger as his editor-in-chief was always going to be a poignant note. The end of an era.
And Buffett was moving on the subject: “In reality, Charlie was the ‘architect’ of the present Berkshire, and I acted as the ‘general contractor’ to carry out the day-by-day construction of his vision."
But there was a deeper elegiac tone to this newsletter. One indeed that Munger had foreseen decades earlier. Buffett flagged the end of an eon, saying bluntly that the trillion-dollar business has virtually “no possibility of eye-popping performance” in the years to come.
“There remain only a handful of companies in this country capable of truly moving the needle at Berkshire, and they have been endlessly picked over by us and by others,” Buffett wrote. “Outside the US, there are essentially no candidates that are meaningful options for capital deployment at Berkshire.”
