Editor’s note: Beginning this week, Porter now delivers the Daily Journal every day that markets are open – that is, every weekday, Monday to Friday.

Inside today’s Daily Journal…

March 2, 2026

Dear Esteemed Directors,

I urge you to return Berkshire Hathaway (BRK) to its original form: the greatest compounding machine the world has ever seen.

Berkshire owns some of the world’s best insurance companies. For decades it compounded its equity at more than 20% a year through underwriting profits – by growing its “float” consistently and by investing that float and all of its earnings into the world’s best businesses, such as American Express (AXP), Coca-Cola (KO), and Apple (AAPL).

Almost as impressive, it long avoided the “conglomerate trap” – it didn’t buy many whole businesses, whose operations it would have to fund with its own precious cash. And it owned no businesses that Warren Buffett couldn’t fully handicap.

But, beginning in 2000 – and perhaps because of Buffett’s age – Berkshire regrettably abandoned that discipline. It has since invested hundreds of billions of its hard-won cash into many businesses that no one can handicap.

Worse, it has repeatedly bought whole businesses with very average economics, even when partial stakes of excellent businesses were readily available on the public markets, perhaps because of a mistaken belief that the resulting tax efficiency would prove more valuable than simply buying the better business. (Analysis to follow.)

Berkshire has now become what Buffett mocked for decades: a conglomerate built for the ego of its management team, not for the benefit of its shareholders.

As I will document fully in this letter, the current management team isn’t capable of maximizing the return on these assets. That’s been proven by their lackluster results for decades.

Berkshire’s decline in returns is not subtle. It is stark, measurable, and accelerating:

Management has warned that this decline in performance is inevitable – a mathematical certainty, they’ve said. But that isn’t true: there is no compelling reason to lash assets that are better funded with debt to the world’s best insurance company, which must be funded with equity. Likewise, had Berkshire stuck to owning partial interests in the world’s best businesses, instead of having to manage (and fund) a huge array of mediocre businesses, it would have continued to compound at market-beating rates for many decades to come.

Thus, despite the inevitable management claims to the contrary, Berkshire’s decline isn’t inevitable and you, wise directors, have a legal duty to stop this descent into mediocrity.

If the long-term decline isn’t yet concerning to you, then the company’s Q4 operating-earnings collapse of nearly 30% should have shocked you. It didn’t surprise me: I’ve long believed it was inevitable and have warned about this outcome for almost a decade.

This is the inexorable mathematical consequence of a doctrine that transformed America’s greatest compounding engine into a $1 trillion value trap.

The once-vaunted “Buffett Premium” has evaporated. It has been replaced with the “Berkshire Discount.”

As independent directors, your fiduciary duty under Delaware law is unambiguous: maximize long-term shareholder value. You preside over a fortress balance sheet of $373 billion in cash and equivalents, the world’s finest insurance float of $176 billion (at negative cost), and a $298 billion equity portfolio of enduring franchises. Yet you allow this capital to be deployed in a structure that systematically destroys value.

The time for nostalgia is over. The Institutional Imperative must yield to fiduciary obligations. Berkshire Hathaway must be restored using its original structure and strategy: an insurance company funding long-term investments in the world’s best companies.

As Berkshire Hathaway grew, Buffett began to purchase control stakes in mediocre businesses, rather than owning partial stakes in far superior businesses.

The stated rationale for these whole-company acquisitions was tax efficiency: Berkshire could reinvest 100% of earnings pre-tax, avoiding dividend taxation. And while that advantage is real, actual results demonstrate that industry realities, scale advantages, and brand values far outclass tax efficiency.

Left unspoken was the ego gratification: Buffett clearly believed he could allocate capital in virtually any industry in the world and do so even more effectively than than the best CEOs in those industries.

He was woefully wrong.

The results of “Buffett’s Conceit” have been a hidden catastrophe for the shareholders of Berkshire for more than two decades, since around 2000.

Where Berkshire invested a large amount of capital in a control transaction, the public company analog – with superior unit economics, scalable growth, brand power, capital efficiency, and reinvestment opportunities – have produced compounding differentials of +4% to +14% annually.

Over decades, this massive outperformance gap overwhelms any tax or control advantage.

All compounded annual growth rates (“CAGR”) below have been independently verified against historical total shareholder returns (price appreciation + reinvested dividends, adjusted for splits) and Berkshire’s own reported private returns. These are not hindsight exercises. In each case, at the precise moment of acquisition, the public alternative was the obvious superior business – larger scale, stronger moat, faster growth, higher return on invested capital (“ROIC”) – and readily available. Berkshire itself often held or sold the public analog contemporaneously.

Here are the seven clearest examples:

On a capital-weighted basis, these decisions have cost Berkshire’s investors almost $1 trillion.

In short, simply buying a substantial stake in the very best public company would have produced massively superior results and, perhaps more importantly, would not have saddled Berkshire with huge, ongoing capital expenditures and the management challenge of trying to efficiently allocate capital in dozens of different industries.

Buffett and Munger’s strategy, for decades, was to invest in “wonderful businesses at fair prices.” The take-private strategy repeatedly violated that axiom by choosing fair businesses at good prices instead.

Berkshire’s current structure makes no sense.

Insurance demands near-100% equity capitalization to absorb tail risks. Railroads and regulated utilities demand high leverage to achieve acceptable returns on equity. Trapping both inside the same equity fortress is financial malpractice.

Berkshire’s $373 billion cash hoard – yielding Treasury-bill rates — is being used, in economic substance, to fund asphalt, turbines, and railcars. The result is a consolidated return on equity (“ROE”) of 10%.

That’s unacceptable. The board must restructure the business.

Berkshire Hathaway is suffocating the world’s greatest insurance company by burying it underneath a poorly-managed railroad, a power company on the verge of litigation-induced bankruptcy, and dozens of other mediocre businesses that can’t substantially out-earn the cost of Berkshire’s equity-funded capital.

Outside of Buffett’s desire to avoid seeing his company broken up, there is no explanation for Berkshire’s current structure.

Berkshire’s decentralized model, once a virtue, has bred inertia:

These are the results of a management team that’s been asleep at the wheel for two decades.

And the most recent quarterly results – a 30% decline in operating earnings – reveal how poorly managed Berkshire’s operating companies have become. Change is needed – now.

Berkshire Hathaway must be restructured to realize the enormous value of its insurance companies and its investment portfolio. It is urgent that this occurs before the huge risks in the other businesses overwhelm the entire company.

My proposed restructuring would unlock approximately $300 billion in enterprise value and re-rate the core business to a premium multiple. Berkshire should be restructured into five different businesses, organized around industries and optimal capital structure.:

This restructuring would unlock a huge amount of value and allow Berkshire’s managers to unshackle themselves from what they’ve complained about for decades: too much capital.

After prudent reserves, $273 billion in excess cash would remain. Berkshire could immediately issue a $250 billion special dividend.

Hoarding that much capital inside a 10% ROE conglomerate is management malpractice.

The board must take action.

Berkshire Hathaway is not merely a company. It is an American institution whose stewardship affects millions of shareholders, retirees, and the broader economy.

Berkshire in its original strategy served brilliantly in the 20th century. Today, however, instead of being a leader, it has become a 21st-century anchor. It is time to rejuvenate capitalism’s best all-time compounding machine. And it is your responsibility to do so now.

The Institutional Imperative whispers “do nothing.” Fiduciary duty – and the verified mathematics of declining ROE– demand you act.

Return Berkshire to its original, high-ROE form: the world’s best insurance-and-investments compounder.

The shareholders of Berkshire Hathaway – and the nation that has long looked to Omaha for capital-allocation excellence – await your response.

Respectfully and urgently,
Porter Stansberry

Tell me what you think: [email protected]

Good investing,

Porter Stansberry
Stevenson, Maryland

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1. A new war in the middle east. The U.S. and Israel launched a targeted bombing campaign against Iran that eliminated the nation’s supreme leader. Iran retaliated against Israel and U.S. military bases in nearby countries including Kuwait, Qatar, Saudi Arabia, and the UAE. Energy infrastructure is under attack, and shipping through the Strait of Hormuz, where roughly 20% of global oil and liquefied natural gas (“LNG”) exports flow each day, has been disrupted. Oil prices rose 7% today, and European natural gas prices jumped as much as 50%.

2. Bad news for Europe is great news for Venture Global. Europe’s dependence on geopolitically-vulnerable LNG supply chains makes U.S. Gulf Coast export supplies increasingly valuable. Complete Investor recommendation Venture Global (VG) – which operates massive LNG facilities in Louisiana, far from Middle Eastern conflict zones – surged as much as 20% today following the attack on Iran (and a Q4 earnings beat). According to Goldman Sachs research, even a one-month closure of the Strait of Hormuz could cause European gas prices to double from today’s already-elevated levels. The longer this conflict drags on, the more the world will need American LNG – and VG is ideally positioned to benefit.

3. U.S. manufacturing activity strengthens again. This morning, the Institute of Supply Management (“ISM”) reported that its U.S. Manufacturing Purchasing Managers’ Index (“PMI”) came in at 52.4 for February, down slightly from January’s 52.6 but still comfortably above the key 50 level separating expansion from contraction. After contracting for 10 straight months through December 2025, back-to-back expansionary readings suggest this isn’t just a seasonal head fake.

To show how much better Berkshire Hathaway would perform if, instead of owning a huge number of mediocre businesses, it instead held the world’s best businesses, Porter launched the Better Than Berkshire portfolio in May 2025. The index matches Berkshire’s asset allocation with publicly traded alternatives to Berkshire’s current holdings. Since then, Better Than Berkshire has generated a 14% return versus the conglomerate’s embarrassing 1.8% decline.

Kent P. writes:

Porter Comment: Kent —

If there is no way to save yourself, you’re dead already. But every prediction of the same, in regard to human life on this planet, was wrong. And so was peak oil, the Malthusian starvation narrative, etc… all of them. It’s just logic. If there is no solution, there is no problem. But what this really teaches is, there was no real problem in the first place.

Dan F. writes:

Bill D. writes:

Porter Comment: Sigh.

Ian C. writes:

Ben T. writes:

Porter Comment: Ben —

The U.S. spends $1 trillion a year on the military, which is as much as the rest of the world, combined. Why? There is no credible international threat to our sovereignty and there hasn’t been since the Civil War.

Even so, the best way to ensure that our military industrial complex remains the best in the world is through the crucible of global competition. The sure way to end up with Soviet-level military equipment is doing as you suggest.

By the way, we have 5,000+ thermonuclear warheads, each of which could completely destroy the largest cities in the world. We have the capability to drop these down someone’s chimney within an hour of the order being given – anywhere in the entire world. And that’s the weapon’s systems that are public. I’m certain our classified capabilities are far more lethal. So… why do we need anything else?

Since 1812 no nation has invaded us. But, in the last 30 years, we’ve spent more than $15 trillion (!) on foreign wars that didn’t advance a single national interest.

And that’s what you should be afraid of: the idiots in D.C. bankrupting the entire country.

Since World War II our armed forces have killed thousands of innocent people in countries all over the world. Not a single one of these military adventures were necessary for the defense of our nation. And not one of them was undertaken after Congress declared a war, as is required by our Constitution.

Ben, the hostile regime is in D.C., not in Vietnam, or Iraqi, or Iran. And the other people in the world that could possibly threaten that regime is us – the American people. The military doesn’t exist to protect us. It exists to protect them from us.

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