Barron’s published my letter on Warren Buffett:
To the Editor:
As someone who has closely followed Warren Buffett since 1980, and who regularly brings students halfway across the country to attend the Berkshire Hathaway annual meetings, I would like to answer a question that Andrew Bary raised in “Beyond Buffett” (Cover Story, June 18): “Why is Berkshire’s cash better than anyone else’s?” The simple answer is that when Berkshire acquires a company, not only is it a friendly offer, but it also permits the owner-managers of a firm both to convert their stake into cash and to retain management control of the firm.
The acquired firm then becomes a permanent part of Berkshire. By contrast, private-equity firms generally replace senior management, add debt, cut expenses, and then sell the firm three to five years later.