American Consequences - August 2017

What does all that even mean? Out in the Midwest where I come from, the last “connecting wind to the land” tweet from GE would mean, “Hurry up, Maw, get down in the root cellar. There’s a twister a-coming!” “Builds, powers, moves & cures the world”? According to this description, GE produces accretion of dust and gas in the early solar system 4.6 billion years ago then asks, “Did the earth move for you too?” And when our planet suffers from climate ills, we’re supposed to call GE CEO Jeff Immelt – who just got fired – and he’ll tell us, “Take two asteroids and call me in the morning.” As for “powers... the world,” I guess we’re supposed to think that the sun shines out of GE’s... How is a retail investor supposed to think anything cogent about this kind of company? And I’m not even touching on GE’s almost innumerable subsidiaries... such as GE Capital (which GE is trying like hell to get rid of ), GE Automation & Controls, GE Wind Energy to make us less dependent on petroleum, Baker Hughes oil-field services to make us more dependent, GE Jenbacher that manufactures “cogeneration modules” whatever those may be, and Amersham with its “radioactive material for peacetime uses.” (Got a termite problem? Contact Bikini Atoll Pest Control.) Berkshire Hathaway is even more of a dog’s breakfast. I count 64 companies it controls, but it’s early in the day and the number may have gone up by now. Except for a group of insurance providers,

most of the businesses the Berkshire companies are in bear a chalk-to-cheese relationship to the businesses the other Berkshire companies are in... Here are 10 of them: 1. NetJets 2. The Omaha World-Herald 3. Acme Brick 4. Fruit of the Loom 5. Borsheims Fine Jewelry 6. GEICO 7. Burlington Northern Santa Fe Railway 8. Dairy Queen 9. Benjamin Moore 10. Duracell There’s a story in there somewhere... “Hop on a G3 and get here quick because – stop the presses – I’m marrying a brick. Need some new underwear. Already have the ring. The little lizard was going to be my best man, but he got run over by a train. We’ll serve ice cream cones at the reception then go out and paint the town red. It will recharge your batteries!” But what’s the story for the retail investor? It would take a genius to keep track of all this different stuff. Maybe Warren Buffett is a genius. But he’ll be an 87-year-old genius on August 30. Think he remembers everything he’s bought? The Price Puzzlers Amazon, which is basically a glorified yard sale, doesn’t pay a dividend, had a net income return of 0.5% on its market capitalization, and has a P/E of 192 (see chart).

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