My last point is to note that a significant omission from the list this time is Berkshire Hathaway (BRK/A or BRK/B). For many years, I have felt that one could hardly do better on a risk-adjusted basis than BRK. Warren Buffett has now managed to raise that company's book value (assets less debt) by an average of about 20% annually for the last 46 years (at least through 2010). Generally, the market price has done better than that! Even if Berkshire Hathaway performance should slow down considerably, it is likely to continue exceeding the S&P 500 Index. Berkshire Hathaway usually accomplishes such feats while keeping large amounts of short-term bonds or cash reserves. Plus, its business holdings, such as Geico or See's Candies, as well as its major shareholder positions, such as in Coca Cola, are among the most lucrative, with the best returns on investments, available.
The one significant fly in that attractive ointment, however, is that Warren Buffett is now in his 80s. It is hard to imagine anyone else, even the best person he might select ahead of time, being able to easily or reliably match his legacy. My anxieties along these lines were not allayed on learning that David Sokol, till then one of BRK's best executives and earlier speculated as among Buffett's top picks to be his successor, left the company in some disgrace last spring after an ethically questionable act. Nor were they dispelled on learning this month that WB had selected his son, Howard, whose history has been somewhat checkered, to be Berkshire Hathaway's "guardian of the culture" and chairman after Warren dies. Finally, it is unlikely that any company as large as Berkshire Hathaway has become (market capitalization $186 billion this month) can continue to grow its profits at anything like the 20%+ annual rate it has in the past.