Berkshire's Diversified Portfolio and Large Cash Hoard Make It a Safe Haven in Uncertain Markets

While Berkshire's operating businesses have generally provided the firm with a narrow moat on a combined basis, it has been the company's and management's ability to produce additional excess returns from the cash flows thrown off by its disparate operations that had historically pushed our moat rating into wide territory. That moat rating, however, became increasingly harder to justify, not just because CEO Warren Buffett's ultimate departure will likely damp future investment returns, but because we continue to see slippage in some of the moat sources that support the economic moats in a few of its main operating businesses.