Next, Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) still sells at a discount to our estimate of its intrinsic value. We believe Buffett and his successors are likely to be able to compound at a reasonable pace, particularly due to the ability to buy listed or unlisted companies in their entirety. A few looming technological innovations, though may be tough for some of Berkshire's businesses: driverless cars would negatively impact insurance subsidiary Geico, while driverless trucks would be a large negative for the railroad business, Burlington Northern. If battery technology continues to improve, at some point the storage of electricity will make renewable energy a lot more competitive against traditional utilities, a risk for Berkshire Hathaway Energy.
This conglomerate, however, is well equipped to deal with obsolescence: after all, Berkshire is quite unique in its ability to take cash flow from mature or declining business A to invest successfully in a totally unrelated business B. Hopefully the lack of red tape, the investment culture, the candor, and the ethics on display at Berkshire will survive both Warren and Charlie.
From Charles de Vaulx (Trades, Portfolio)'s semi-annual 2016 IVA Funds call.
