Why Berkshire doesn't sell its businesses · Transcript · BuffettMungerGPT

WarrenCharlie and I have this quirk which business schools would teach is a mistake in that if we have a business that's underperforming and we could sell it and achieve greater returns someplace else, we don't do it. We say that if a business is going to permanently lose money, we'll get rid of it. If it has major labor problems over a period of time, we might get rid of it. But we are not going to engage in what we call gin rummy type management. where we pick up one card and discard another. And so we will not, if a business has been disappointing to us, but we like the people there and we're not having, not because of labor problems, and we're not going to have to put money in incessantly, we will stay with it when business school theory and management theory would say get rid of it and do something else. We don't disagree with the people that do it that way. It's just that we don't want to live our lives that way. And if we owned 100% of Berkshire, we wouldn't do it that way. And we don't, we just, we want the shareholders to know that we have this, this mindset that may produce slightly suboptimal returns because of our attitude, but that's the way we're going to play it. And we tell people ahead of time that that's the way we're going to play it. We like being associated with the managers that we are, even the ones that are in facing headwinds. I mean, but in the sense you almost identify. more with the ones that are facing Edwins because they're doing a hell of a job under very tough conditions. And every business decision or investment decision is going to work out perfectly and some businesses are going to run into unexpected surprises. But the people that have gone in with us have stuck with us in times like that and our attitude is we'll stick with them. So to the, I would say that how the people behave with us after we buy the business is an important part of how we feel about, you know, the whole relationship as well as well as the returns achieved.