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Strategies & Market Trends : Value Investing
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To: Paul Senior who wrote (58848)1/4/2017 1:01:16 PM
From: Graham Osborn1 Recommendation   of 78763
 
It's a common misperception (not referring to you) that's Berkshire's capital base benefits the fully owned subsidiaries. This might be true in insurance, but Buffett is pretty adamant that other businesses should generate at least enough cash to grow profitably - they don't throw good money after bad. Probably Berkshire's biggest value-add for these companies is blocking their ability to make stupid capital-allocation decisions, e.g. doing an acquisition with stock when they should be doing a buyback. It just goes to show how poorly many public companies are managed. I see much of the same folly in HBI's balance sheet management.
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