Buffett was responding to an investor who pointed out that if Berkshire had deployed its cash and Treasury bills in an index fund over the last 15 years (keeping a modest $20 billion cash cushion), at the end of 2018, the company's then-$112 billion position would have been worth $155 billion — an opportunity cost of more than 12% of Berkshire's book value.
Buffett said his successor may choose an index fund over T-Bills. But he argued that strategy could limit Berkshire's opportunities, such as those that arose during and after the financial crisis. In September, 2008, Berkshire invested $10 billion in Goldman Sachs (GS) preferred stock, which paid a hefty 10% dividend.
Submitted May 04, 2019 at 07:29PM by coolcomfort123 http://bit.ly/2PV5Pyx
