The gyrations of a pointless and uncaring universe

Berkshire post Buffet
12 March, 2026
For 20(?) years I’ve used berkshire hathaway as a balance to the rest of my tech heave portfolio. And buffet has been great but he and munger are gone now. I could get out now via an exchange fund but I would basically be betting that berkshire will underform the tech heave sp 500 by 0.53% if I do that.
So I asked chat gpt here’s the AI slop below.
Will Berkshire Hathaway Still Beat the Market After Buffett?
A question I’ve been thinking about while considering whether to exchange Berkshire Hathaway stock into a diversification fund:
Why assign something like a 40% probability that Berkshire still outperforms the market once Warren Buffett and Charlie Munger are gone?
Buffett and Munger were extraordinary outliers. Expecting their successors to replicate that performance seems unrealistic. But Berkshire is also not a normal company — it has structural advantages that could still generate some alpha.
Below is how I think about the question.
1. First principle: Buffett’s performance was statistically extreme
From 1965–2023 approximately:
Metric Berkshire S&P 500
Annual return ~19.8% ~10.2%
Excess return ~9–10%
Sustaining ~10% annual alpha for nearly 60 years is almost unheard of in financial history.
Implication:
Even if Berkshire’s next leaders are excellent, the base-rate expectation is regression toward the market average.
The real question therefore becomes:
Does Berkshire still possess structural advantages that could generate some modest alpha even without Buffett?
2. Greg Abel (future CEO)
Background
Greg Abel currently runs Berkshire’s non-insurance operating businesses and previously led Berkshire Hathaway Energy.
Under his leadership:
- MidAmerican / Berkshire Hathaway Energy grew from a ~$2B acquisition
- to a $100B+ enterprise
- with major expansion into renewables and infrastructure.
Strengths
Investors tend to view Abel as strong in three areas:
- operational discipline
- large-scale capital deployment
- internal credibility with Buffett
Buffett himself has repeatedly said:
“Greg understands capital allocation.”
That is a remarkable endorsement coming from Buffett.
Limitations
However, Abel is not Buffett.
He is:
- not a public equities investor
- not known for macro insight
- not a famous stock picker
Abel’s role will likely be more about capital allocation across Berkshire’s businesses, not selecting individual stocks.
Confidence: very high.
3. Todd Combs and Ted Weschler (investment managers)
These two investment managers already run a significant portion of Berkshire’s equity portfolio.
Estimated capital under management inside Berkshire:
Manager Estimated Capital
Todd Combs ~$15–20B
Ted Weschler ~$15–20B
They have been responsible for several notable investments widely believed to include:
- Apple position expansion
- Snowflake
- Amazon
- Charter Communications
Their historical records
Ted Weschler
- Ran Peninsula Capital
- Reportedly achieved ~30% annual returns over ~20 years
Todd Combs
- Ran Castle Point Capital
- Generated ~13–14% annual returns
Both are impressive investors, but neither has demonstrated Buffett-level results over decades with massive capital.
4. Structural advantages Berkshire still has
Even without Buffett’s stock picking ability, Berkshire retains several advantages that few companies possess.
Insurance float
Berkshire’s insurance subsidiaries generate enormous float.
Roughly: ~$160B+
This float effectively acts as low-cost leverage.
Most investment firms cannot replicate this structure.
Permanent capital
Unlike mutual funds or hedge funds, Berkshire never faces:
- investor redemptions
- quarterly capital flows
- forced selling
This allows Berkshire to hold investments far longer than typical asset managers.
Opportunistic crisis investing
During financial crises Berkshire has repeatedly negotiated unusually favorable deals:
Investment Terms
Goldman Sachs (2008) 10% preferred shares
Bank of America (2011) preferred + warrants
Occidental Petroleum (2019) 8% preferred
These deals occur because Berkshire can deploy huge amounts of capital quickly.
Massive cash reserves
Berkshire currently holds roughly: $160B+ in cash and T-bills
In a financial crisis this becomes extremely valuable optionality.
5. Reasons Berkshire could underperform
There are also real structural headwinds.
Size
Berkshire’s market capitalization is roughly: ~$900B
At that scale it becomes difficult to find investments large enough to materially move the needle.
Apple concentration
Apple has represented roughly 40%+ of Berkshire’s public equity portfolio.
Future Berkshire performance is therefore heavily linked to Apple’s trajectory.
Cultural dependence on Buffett
Buffett shaped:
- Berkshire’s acquisition discipline
- its reputation for fair deals
- its investor trust
That reputation may weaken somewhat after he is gone.
6. A realistic probability model
Based on historical base rates for great investors and Berkshire’s structural advantages:
Scenario Probability
Slight alpha (1–2%) ~35–40%
Market-like returns ~40–50%
Underperformance ~15–25%
This leads to an expected alpha near zero but slightly positive, which is why I assign roughly a 40% chance that Berkshire still modestly outperforms the market.
Confidence: moderate (~60%).
7. The real decision framework
For investors deciding whether to hold Berkshire or diversify, the question becomes:
Do you believe Berkshire will beat the market by more than ~0.5% annually?
Why 0.5%?
Because that is roughly the annual cost of many diversification strategies such as exchange funds.
If Berkshire’s expected excess return is:
- >0.5% annually → holding Berkshire may be rational
- <0.5% annually → diversification may be preferable
8. My current view
My expectation for Berkshire over the next couple of decades:
Factor Outlook
Management quality Very strong
Structural advantages Significant
Ability to replicate Buffett alpha Very unlikely
Chance of mild alpha Reasonable
In other words:
Berkshire will likely remain an exceptionally well-run conglomerate that performs roughly like the market, perhaps slightly better in some environments.
Which is still a remarkable outcome for a $900B company.
One final observation
Going forward, Berkshire’s biggest performance driver may not be stock picking at all.
It may simply be interest rates.
With over $160B in Treasury bills, every 1% increase in short-term rates generates roughly: ~$1.6B additional annual earnings
That dynamic did not exist during the zero-rate era — and it may shape Berkshire’s future returns more than most investors realize.

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Metric	Berkshire	S&P 500
Annual return	~19.8%	~10.2%
Excess return	~9–10%

Manager	Estimated Capital
Todd Combs	~$15–20B
Ted Weschler	~$15–20B

Investment	Terms
Goldman Sachs (2008)	10% preferred shares
Bank of America (2011)	preferred + warrants
Occidental Petroleum (2019)	8% preferred

Scenario	Probability
Slight alpha (1–2%)	~35–40%
Market-like returns	~40–50%
Underperformance	~15–25%

Factor	Outlook
Management quality	Very strong
Structural advantages	Significant
Ability to replicate Buffett alpha	Very unlikely
Chance of mild alpha	Reasonable

Grocery Stores in major metros

11 March, 2026

In case you wanted to know the major grocery store distributions. (kroger and albertsons have a ton of sub brands)

More data coming in hte future https://github.com/paulgmiller/careme/issues/99

metro_name	zip_code	albertsons	aldi	heb	kroger	publix	walmart	wholefoods	total
Atlanta-Sandy Springs-Alpharetta GA	30044	0	25	0	19	72	31	7	154
Baltimore-Columbia-Towson MD	21234	15	21	0	2	0	15	3	56
Boston-Cambridge-Newton MA-NH	02169	41	4	0	0	0	10	22	77
Charlotte-Concord-Gastonia NC-SC	28277	0	19	0	27	16	20	3	85
Chicago-Naperville-Elgin IL-IN-WI	60629	88	87	0	16	0	25	18	234
Dallas-Fort Worth-Arlington TX	75040	48	25	6	12	0	50	10	151
Denver-Aurora-Lakewood CO	80249	19	0	0	14	0	21	7	61
Detroit-Warren-Dearborn MI	48235	0	37	0	16	0	17	4	74
Houston-The Woodlands-Sugar Land TX	77084	11	20	46	17	0	39	10	143
Los Angeles-Long Beach-Anaheim CA	90011	73	24	0	54	0	30	25	206
Miami-Fort Lauderdale-Pompano Beach FL	33186	0	16	0	0	68	16	5	105
Minneapolis-St. Paul-Bloomington MN-WI	55432	0	38	0	0	0	13	7	58
New York-Newark-Jersey City NY-NJ-PA	11368	17	25	0	0	0	13	35	90
Orlando-Kissimmee-Sanford FL	34787	0	19	0	0	65	30	3	117
Philadelphia-Camden-Wilmington PA-NJ-DE-MD	19120	55	45	0	0	0	28	11	139
Phoenix-Mesa-Chandler AZ	85383	22	5	0	16	0	21	0	64
Portland-Vancouver-Hillsboro OR-WA	97086	50	0	0	18	0	16	8	92
Riverside-San Bernardino-Ontario CA	92880	43	18	0	6	0	29	2	98
San Antonio-New Braunfels TX	78249	0	0	52	0	0	34	2	88
San Diego-Chula Vista-Carlsbad CA	92154	29	4	0	5	0	14	1	53
San Francisco-Oakland-Berkeley CA	94565	32	0	0	1	0	7	5	45
Seattle-Tacoma-Bellevue WA	98032	62	0	0	12	0	11	6	91
St. Louis MO-IL	63136	0	40	0	4	0	21	3	68
Tampa-St. Petersburg-Clearwater FL	33647	0	21	0	0	54	25	2	102
Washington-Arlington-Alexandria DC-VA-MD-WV	20906	56	35	0	5	0	9	23	128

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Whistler 2026
21 February, 2026
- family
- photos
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Linux desktop
20 February, 2026
- tech
On the first day after my last day at MSFT, I reimaged all my machines. Windows itself is not bad (SSH, PowerShell, and WSL are fine), but the junk our IT department installs definitely is. So while I was reimaging, I decided it was time for Linux desktops on my three machines.
Bee / Nuc + Omakub
This has worked pretty well. Camera and audio are fine. I had to fight a Bluetooth mouse disconnect, but ChatGPT seemed to figure it out. Chrome, VSCode, Spotify all seem fine. Still using GNOME Terminal over Alacritty some of the time. Omakub certainly has options.
Omarchy on my pc part picker build (ryzen)
This has been fun. Tiling window manager, no overlap. It is better at forcing you to organize things. Browser tabs still get out of control though. I have not dug into Arch/Pacman yet. But it does seem to go down when not in use overnight, so I need to figure out uptime. Maybe CPU idle bug?
Ubuntu 25 on Lenovo Snapdragon
FAQ Oof, this is pretty painful. Writing this because it just hard-rebooted twice, and ChatGPT and I could not find much in journalctl. Suspend does not really work and drains your battery overnight. Dealing with that by powering off on laptop lid close, but it sucks to lose anything you did not save. Audio and camera don’t work. Even when not suspended, battery life does not seem quite as good. No Chrome, which is mostly a problem since it is my password manager. I exported and imported, but it does not seem sustainable.
Still in queue.
Bluefin/Fedora and ground-up NixOS. Also, do I take the Neovim pill?
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First Week: No MSFT
6 February, 2026
- family
- tech
I am no longer employed by MSFT after 20 years of work, plus all the school beforehand.
Week 1
Monday
- 5k treadmill
- Kids drop-off
- Breakfast with my wife
- 30 minutes of Careme (more end-to-end tests)
9:30–4:00 PM: Funeral
- 1 hour of Omarchy/Hyprland and minimal Careme work
- Picked up Nate; cooked dinner for Nate
- Folded laundry
- Cooked dinner for Wintana while she was at soccer
- Beer pickles
Healthcare admin, family calendar, Careme e2e tests.
Netflix (His/Him).
Tuesday
- Kids dentist and drop-off
- Kids bus and orthodontist
Clerk — 6 hours.
The first two hours Codex completely failed. Tried manually in the afternoon and realized I needed frontend code, and Clerk has no way to get a session cookie in dev 😞. Also, Clerk JWTs might just be too short-lived, and I may need to mint my own.
So really, a design issue that Codex/Claude would happily throw more stuff at without any of it sticking:
https://github.com/paulgmiller/careme/pull/166
- Kids pickup, dinner (mussels!), Dominoes, house cleaning
Is Clerk the right choice? Should I manage my own session rather than use JavaScript on every page?
- Moved Cloudflare over to the LLC account
- Watched the stock market go down
- Looked at other auth options in the evening (Stytch, Auth0, Entra)
Wednesday
- Beef stew prep plus normal breakfast/dishes stuff
- About 2 hours refactoring auth so it’s less Clerk-specific — felt better afterward:
  https://github.com/paulgmiller/careme/pull/166
- New lunch place, keg drop-off, birthday beer purchase
- Ski bus — 6 hours
- Ate stew
- Watched the Pats’ 2015 Super Bowl run and read to the kids
- Watched the stock market go down
- Got beaten by my wife at shuffle puck and random TV
Thursday
- Kids breakfast, dishes, lunches
Careme work:
- Dockerfile-based Tailwind — 30 minutes
  https://github.com/paulgmiller/careme/pull/171
- Deployed auth to production!!! (fixed sign-out and other issues along the way)
  https://github.com/paulgmiller/careme/pull/166
- Did dark mode, then reverted
- Better readiness probe
  https://github.com/paulgmiller/careme/pull/183/changes
- Wrote a tiny CLI to move users and list ingredients
- Talked about exchange funds with Fidelity
- Ate leftovers
After dinner:
- Nighttime run
- Read to kids
- Folded laundry and drank a beer
- No computer activity at night
Friday
- Kids breakfast and drop-off
- Sammamish weight workout and swim
- QFC shopping: bought two meals and lots of other kitchen stuff
- Set up parent–teacher conference
Careme:
- Concluded Instacart does not want me to intermediate between stores and customers. You can search for ingredients, but they give back an HTML shopping list for the customer.
- Signed up for sites that scrape Albertsons and Whole Foods.
- Poke lunch and a walk.
- Realized Walmart might have a public API. Learned about affiliate vs. direct.
Week 2
Over the weekend, cooked an excellent Careme dinner for friends. https://careme.cooking/recipe/le76qpHPhb-EK2KB7TqGZA== https://photos.app.goo.gl/83E1cXchei89Qsg77
Applied to Y Combinator and started a locations UI update.
Monday
- Samena workout. Squats and bike.
- Finished auth bug
- Locations UI to prod.
- Started better wine pairing work.
- Two dinners and laundry.
Tuesday
- Pancake breakfast for kids
- Catch-up talk on exchange funds (20% in real estate due to IRS rules)
- Got questions on recipes working, though there was not enough context and reload behavior was bad: https://github.com/paulgmiller/careme/pull/203
- 4-mile run and met Ruben for lunch. Totally failed to find good food; Ruben gave us bad Seattle dogs and nachos.
- Failed to trademark, created many issues (mostly non-technical), minor updates, SEO research, sitemap started.
- Colin’s Pub
- Missed bus. Careme steelhead (slaw great, trout meh)
- India scraping company did not schedule a 9 PM meeting as promised
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