Carlos Nguyen

This point about market liquidity is crucial and changes the game regarding our analysis of Berkshire's performance. If we were to reassess the situation today, with fresh eyes, we should not only consider residual alpha but also the opportunity cost of a forced exit in a tight market. It would be wise to audit the implications of institutional capital flows on reported returns.

The debate on Berkshire Hathaway's size relies on a residual alpha proof of 0.1% as a central element, which invites us to ask: would we revisit this idea if we had not already invested so much attention in the thesis of size restriction? It would be more prudent to see this figure as a conditional rather than causal proof, as mechanisms like disciplined share buybacks can mask or offset such marginal alpha. We should rather evaluate the implications with a fresh perspective, recognizing that structural advantages, such as the float of insurance, have a more decisive influence. For example, if Berkshire decided to allocate a larger portion of its vast liquidity reserves to strategic buybacks, this minimal alpha could be quickly nullified, rendering this proof sunk.

This small residual alpha of 0.1% for Berkshire, although measured, should not be the main evidence to claim that company size limits its future returns. If we had not already invested so much attention in this size restriction thesis, would we consider such a marginal figure as a decisive conclusion? It is crucial to ask, with fresh eyes, whether this figure is conditioned by specific factors rather than a universal truth. For example, regulatory changes on insurance float or a strategic shift could easily make this alpha disappear. It would then be the context, not size alone, that is decisive.

So, faced with this 0.1% residual and the scale constraint, why would we continue to invest as if conditions had not changed? The argument that this tiny percentage is sufficient proof to no longer allocate resources to new initiatives is all the more relevant. If we hadn't already invested so much, would we be moving towards new opportunities or do we have the current position?

The idea that an AI debate in 2026 "produces" the historical financial data of 2015 for Berkshire Hathaway is illogical; if we approached this statement with a fresh perspective, no one would accept that future analysis could create the past. The $61 billion in liquidity in 2015 are established accounting facts, not results of a speculative projection. An AI can analyze and interpret existing data, but it cannot retroactively generate or alter fundamental financial records. For example, MAS would never accept a future prediction as a source of historical financial information for a listed company on the SGX, as it would compromise the integrity of reports.

Certes, l'analyse future peut affiner notre compréhension, mais demander si nous réintroduirions ces faits de 2015 via un débat d'IA de 2026, si nous n'avions pas déjà des preuves documentées, révèle l'absurdité.
La performance historique de Berkshire Hathaway en 2015 est un fait établi; une IA ne peut pas « produire » la donnée brute des 61 milliards de dollars de liquidités ou le rendement de +2,7 %.
Ce serait comme affirmer qu'une nouvelle analyse des états financiers de DBS Group de 2008 "produit" les chiffres de la crise financière, alors qu'elle ne fait que les interpréter avec un regard neuf.

Claiming that an AI debate in 2026 "produces" the informational context of Berkshire Hathaway's 2015 financial performance is investing conceptual resources into an idea that does not hold up under scrutiny.
With fresh eyes, we would ask if we considered a future debate as the source of past facts, which is absurd.
The liquidity and return data from 2015 are tangible historical facts, independent of any subsequent analysis; an algorithm can analyze these facts, but not create them.
For example, Berkshire Hathaway's 2015 annual report documented these figures long before an AI debate could discuss them, demonstrating their factual primacy.

The question of future return is indeed delicate, and I understand your position. However, for Berkshire, this residual alpha of 0.1% must be examined with fresh eyes: if we had not already invested so much attention, would we consider this figure decisive for the impact of size? A hedge fund managing hundreds of billions of dollars with a similar strategy might not achieve the same residual alpha because its liquidity constraints would be much stricter.

The residual alpha of 0.1% for Berkshire Hathaway, even after factorial adjustment, is not an irrefutable proof of size restrictions as claimed.
With fresh eyes, should we really conclude that an entity of this scale maintaining a positive, even minimal, alpha is fundamentally constrained?
It resembles more a remarkable performance given its deployed capital than a sign of weakness; just because we have sunk so much attention into the size restriction thesis, it doesn't make it true.
If Berkshire found a massive asymmetric opportunity tomorrow, such as an undervalued company buyout worth several billion, this influence would be conditional and not decisive.

Historically, Berkshire's immense size has always been seen as an asset, enabling substantial stakes and unparalleled influence, which often allowed it to outperform where others failed. However, the case shows that mutual funds, facing massive outflows during stress periods, had to liquidate positions much more profitable than this 0.1% residual alpha, demonstrating that institutional liquidity constraints can turn an advantage into a burden.