Berkshire Hathaway Part I

**David Rosenthal** (0:00)
Gonna need some of that, running the goo that you eat.

**Ben Gilbert** (0:05)
Oh man, I should have brought a snack.

**David Rosenthal** (0:07)
Well, great thing about not being live, we could always just take a break if need be.

**Ben Gilbert** (0:11)
It's true.

**David Rosenthal** (0:11)
On the Warren and Charlie, don't take a break.

**Ben Gilbert** (0:13)
It's true, yeah. Oh my God, what are we doing? We should have brought peanut brittle and cherry cox.

**David Rosenthal** (0:18)
Oh snap!

**Ben Gilbert** (0:19)
For part two, peanut brittle and cherry cox are mandatory.

**David Rosenthal** (0:24)
Mandatory, oh. Well, that's okay because we're not really talking about Berkshire today.

**Ben Gilbert** (0:28)
That's right. It was intentional.

**David Rosenthal** (0:30)
Yeah.

**Ben Gilbert** (0:41)
Welcome to Season 8, Episode 5 of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert, and I am the co-founder and managing director of Seattle-based Pioneer Square Labs and our venture fund, PSL Ventures.

**David Rosenthal** (0:58)
And I'm David Rosenthal, and I am an angel investor based in San Francisco.

**Ben Gilbert** (1:03)
And we are your hosts. Let's talk about the 10 most valuable companies in the world. The first nine are tech companies. There's, of course, the big five in the US. Plus Tesla, of course, because it's 2021

**David Rosenthal** (1:17)
Of course.

**Ben Gilbert** (1:18)
And then you have Tencent and Alibaba from China. The ninth, TSMC, the Taiwan semiconductor manufacturer. And the tenth, the only non-tech company. It's a 182-year-old company that started as a textile mill in New England, Berkshire Hathaway. As most listeners know, Berkshire is far from a textile mill today. It is a holding company, unique in every way, and by far the most successful in history. A few of the companies that they own outright include Dairy Queen, Duracell, Fruit of the Loom, Geico, NetJets, Seas Candies, and even Brooks Running Shoes.

**David Rosenthal** (1:59)
Seattle Company, right?

**Ben Gilbert** (2:01)
Oh, yeah. Oh, yeah. And I'm super loyal. I ran up Mount Sinai wearing them the other morning.

**David Rosenthal** (2:05)
Nice.

**Ben Gilbert** (2:07)
They also own large pieces of many of your favorite publicly traded companies, including Amazon, Johnson & Johnson, Coca-Cola, American Express, Kraft Heinz, Verizon, GM, MasterCard, Snowflake. And now they even own over $100 billion of Apple stock. And somehow the man behind it all, Warren Buffett, has claimed that purchasing Berkshire Hathaway was the biggest investment mistake he had ever made. And for many of you, you're probably learning that Warren Buffett purchased Berkshire Hathaway and it was not something that he founded, which is the first takeaway from this episode.

**David Rosenthal** (2:44)
He claims, we will cover this again much later in the episode, but he claims that purchasing Berkshire Hathaway cost him $200 billion in opportunity cost.

**Ben Gilbert** (2:57)
Well, when you compound something over 50 years, you can come up with some large numbers. So what the heck is this company? How did it come to be? And why is it that even at an all-time high for the stock, so many analysts think it is underpriced today? Well, to do this right, we are gonna need more than one episode, even an acquired-sized episode. So welcome to our first part of our two-part series on Berkshire Hathaway. And in this first part, most of it won't even be about Berkshire the Company. It's about the man, Warren Buffett, and his mental iterations and learnings that would shape what Berkshire would come to be. People always try and reduce what Buffett does to a simple strategy or even a few pithy quotes. In reality, Warren has learned, adapted, and reinvented his strategy at least four distinct times over the decades. In doing the months of research to prepare for these episodes, David and I both learned just how much Warren's thinking evolved to create the absolutely unreplicatable juggernaut that Berkshire Hathaway is today. So on this episode, we bring you the story of Warren Buffett, the learning machine. Are you an Acquired Slack member? If not, what have you been waiting for? It is a stellar community discussing all things acquired, recent episodes, but more importantly, it is just a genuine, smart group of people having a thoughtful, nuanced, and respectful discussion about the tech and investing news of the day. You can join at acquired.fm slash Slack.
This is a great time to tell you about one of our very favorite companies, Crusoe.

**David Rosenthal** (4:35)
So Crusoe, as listeners know by now, is a clean compute cloud provider specifically built for AI workloads. NVIDIA is one of their major partners and literally, Crusoe's data centers are nothing but racks and racks of A100s and H100s. Because Crusoe's cloud is purpose-built for AI and run on wasted, stranded, or clean energy, they can provide significantly better performance per dollar than traditional cloud providers.