I’ve been looking more closely at $BRK.B and I think Berkshire is becoming an interesting defensive holding in this market, but current price does not make it attractive. The stock has performed well, 14% YTD growth, which makes sense when investors are looking for safety, strong balance sheets and durable businesses. Looking back, few things caught my attention in Berkshire’s recent capital allocation: 1. OxyChem acquisition for approximately $9.4B. 2. Taylor Morrison acquisition for approximately $6.8B. 3. A substantial increase in its Alphabet position. $GOOG $GOOGL 4. Investments in Delta, Lennar, Macy’s and The New York Times. Some of these moves make sense to me. Others deserve a closer look. Alphabet is probably my biggest question. It’s a fantastic business, but I would be interested in understanding the valuation and expected returns behind that position. Both Warren and Greg didn’t give much explanation about this investment. And the private placement seems rushed to me. I’m also curious about the homebuilding investments. Are they positioning for a longer-term housing recovery, or seeing opportunities to acquire quality businesses at attractive prices? One thing I wouldn’t overlook is the operating environment across Berkshire’s existing businesses. I wouldn’t be surprised to see some slowdown in its retail and consumer-facing operations. Consumers are becoming more selective, and even Berkshire’s strongest businesses aren’t immune to weaker discretionary spending. The other question is what Greg Abel plans to do with Berkshire’s enormous cash pile. At some point, the opportunity cost of holding that much cash becomes meaningful. I still like Berkshire’s collection of businesses, financial strength and capital allocation flexibility. But at today’s valuation, I’m less enthusiastic than I was when shares were around $480ish Great business doesn’t automatically mean a great investment. I’m looking forward to the next earnings report. I want to see how the underlying businesses are performing, not just how well the stock has held up. Is $BRK.B still a compelling investment at today’s price?
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