What tiny companies do we consider have a most guarantee of being a “next” Berkshire Hathaway (if any association exists similar to this).
Names I’ve listened floated: Markel Corp, Leukadia, Sears Holdings, etc. I’d be meddlesome in word or non-insurance companies.
Common denominators I’ve beheld in “potential” Berkshire-like companies…Note: most companies do not perform a little of these criteria.
1) Ability to consistently grow book-value during a great rate. (MKL, LUK, BRK, SHLD)
2) Conservative in collateral grant – i.e. meaningful your “circle of competence” as well as not receiving risks in businesses we do not understand.
3) Respect for shareholders – not vouchsafing senior manager government binge upon batch options as well as essentially treating a company’s batch be value something.
4) Durable long-term rival advantage: A association with clever code and/or commercial operation pattern which creates tall entrance costs in a margin unavoidable. An easy commercial operation though not a elementary business.
[Other intensity critieria: not vouchsafing a batch separate (reduce sensitivity as well as name for long-term investors), being really regressive with money as well as carrying a predicted money flow, minimal debt load.]
So what companies do we consider have illusory long-term prospects as well as over-time will infer to be marvellous businesses? (forget a short-term) Why? Do any of your businesses operate word “float” to rivet in private-equity similar to buyouts similar to Berkshire?
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