|
I didn't see the Fortune magazine article on CM but Forbes had a cover story a couple or so years ago. The main points were (1) after-tax returns, especially at the corporate level, present a strong edge to investments that can be held 15 years or so, if not forever, and this was something CM taught WB, and (2) BRK's cost of capital from the insurance operations is about zero or even negative (as reported in some detail each year in BRK's annual report. No one here is commenting on this aspect of the General Re purchase. I think WB wanted to get his hands on more long-term bonds, low-cost capital, and, WB followers will note he paid with stock - which he only does reluctantly. In his own words then, he must feel that General Re brings "at least" as much value as the cash alternative, and IMO by some "margin of safety". |
