Warren Buffett's Capital Structure And Alpha; Greenlight Re by balajithinks, Beowulf Capital
[buffett]
Lots of work has been done trying to reverse engineer how Warren Buffett managed to build his $350B behemoth. Tons of books discuss about value investing as practiced by Buffett, while some of the smarter ones delve deeper into the insurance operations that Berkshire operated. When we look closely at the insurance operations, some of the key advantages of this structure are:
- Float generated by insurance offers good amount of leverage for the portfolio that Buffett manages
- Cost of float has been less than zero; Warren Buffett gets paid to manage the float; (see below table) Buffett can borrow cheaper than the U.S. government.
- Float is not directly connected to...
Login required to continue reading.
Setup a free account to get access to this article (no credit card required).
View Full ArticleAlready a member? Log in here
