“Lost stocks” are businesses that create incredible wealth, not through the expansion of their equity multiple with the Wall Street marketing machine or by constantly raising new capital. No, these businesses create wealth by their own internal cash generation plus excellent capital allocation.
Porter says he does not believe that Warren Buffett’s Berkshire Hathaway can reliably beat the overall stock market. Not just because of its foolish preference for lower- quality, private companies instead of market-dominating public companies. Today, the problem with Berkshire is structural.
In today’s Daily Journal, Porter further explains the details of the portfolio he assembled called “Better Than Berkshire,” which mimics the holdings of Warren Buffett’s Berkshire Hathaway, but uses publicly traded companies as replacement for what Berkshire holds.
In today’s Daily Journal, Porter attempts to build a portfolio that’s based on the structure and asset allocation of Berkshire Hathaway’s, but that’s only made up of world-class businesses that, when measured objectively, are better than their Berkshire analogs.