Berkshire's unconventional investment strategies include highly concentrated investments with very long holding periods. The top five positions often account for about 60% to 80% of the company's portfolio, and these positions have been held for over 20 years on average. This low level of activity, referred to by Buffett as "inactivity bordering on sloth", allows for a focus on long-term growth rather than short-term gains. Additionally, Berkshire offers companies freedom from Wall Street scrutiny and near unlimited access to capital. Buffett also spends little time on traditional due diligence, such as meeting management and inspecting operating facilities. These strategies contribute to Berkshire's success by allowing for steady, long-term growth and minimizing the impact of short-term market fluctuations.

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The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success

A book that received high praise from Warren Buffett, The Outsiders chronicles the unconventional techniques that led eight CEOs to outperform the S&P...

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Berkshire's investments were highly concentrated and had very long holding periods. The top five positions accounted for about 60% to 80% of the company's portfolio. Buffett's top stock positions have been held for over 20 years on average. Buffett calls this low level of activity as "inactivity bordering on sloth." A sale to Berkshire gives companies freedom from Wall Street scrutiny and near unlimited access to capital. Buffett spends little time on traditional due diligence, including meeting management and inspecting operating facilities. The Capital Cities deal was finalized in less than 15 minutes.

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The theme of 'inactivity bordering on sloth' in Berkshire's investment strategy refers to the long-term, buy-and-hold approach that Warren Buffett is known for. This approach is more aligned with passive investing, which involves buying and holding a diversified portfolio of assets, rather than trying to beat the market through frequent buying and selling, which is characteristic of active investing. Contemporary debates on active versus passive investing often revolve around the question of whether active managers can consistently outperform the market. Buffett's success with his passive, long-term approach suggests that it can be a viable strategy, although it requires patience and a willingness to ignore short-term market fluctuations.

Traditional sectors like manufacturing or retail can apply the investment techniques used by Berkshire by adopting a long-term investment strategy. This involves concentrating investments in a few high-quality companies and holding onto these investments for an extended period, often over 20 years. This approach requires a deep understanding of the companies invested in and a strong belief in their long-term potential. Additionally, these sectors can benefit from providing companies with freedom from Wall Street scrutiny and near unlimited access to capital, similar to Berkshire's approach.

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