How many HoldCo people are “building the next Berkshire”?
When we started AH it was modeled after Buffett and Berkshire Hathaway. My partner had been to Berkshire multiple times already and had read everything written by Buffett. At this point, we have been to the annual meeting nearly 20 times between the two of us.
I would guess many HoldCo aspirers on 𝕏 had the same inspiration. But whenever someone says they want to build the next Berkshire, people roll their eyes and assume they want to build a 750 billion-dollar company.
What Buffett did was special and unique. He combined the float of an insurance company with one of the greatest investing minds ever. That is not our goal. When we decided to build AH, and build it like Buffett, we aspired to his investment strategy and ideals, not necessarily his outcome.
In his insightful book, Compounding Quality, Gautman Baid writes:
Warren Buffett defines his investment strategy as follows:
1. Buy wonderful businesses
2. Led by outstanding managers
3. Trading at fair valuation levels
That just makes sense to us. Our strategy since we began was:
Buy businesses we understand
Led by people we want to work with
Pay a fair price
There were other rules that we applied:
Hold Forever - Buffett buys his businesses without the intention of selling.
No Shiny Objects - He does not invest in things he does not understand.
High Integrity - “Never do anything in life if you would be ashamed of seeing it printed on the front page of your hometown newspaper for your friends and family to see.”
Delegated Management – Buffett tells his managers to act towards their businesses as if they are their sole owner, it is the only asset they hold, and they can never sell or merge it for a hundred years.
Patience - Buffett and Munger always knew they would be wealthy. They were in no rush and never took on excessive leverage to speed things up.
Enjoy the Process – Buffett calls it “tap dancing to work”. Nothing is worth doing if we do not love it. Both my partner and I have said that if we ever come to the point we are no longer enjoying this, we will look for an exit and move on.
Of course, we want to be successful. But it is not only the outcome and success of Berkshire that we emulate. It is the way they do things. If we live up to these principles, we will consider ourselves successful.