Berkshire

• Moat: negative-cost float, high statutory surplus ratio, GEICO' structural cost advantage, BNSF's right-of-way and the Western duopoly.
• Growth drivers:
  • Compounding float and redeployed retained earnings.
    • Acquisitions - OxyChem, Taylor Morrison.
  • Insurance volume slowdown on pricing and risk headwind.
  • BNSF volume and yield.
  • Regulated rate base growth at BHE.
• Economics: BNSF and BHE are capital-intensive.
• Risks:
  • Social inflation at the insurance businesses.
  • Wildfire tail risk at BHE.
  • Scale constrains the return.
• To watch:
  • GEICO expense and combined ratios.
  • Acquisitions and share buybacks.
  • Union Pacific's proposed merger with Norfolk Southern sits at the STB as Docket FD 36873.

Reports:

• Berkshire Hathaway Business Overview