Drop in the ocean
This week iconic investor Warren Buffett announced that his company Berkshire Hathaway was acquiring an insurance company, Alleghany, for $11.6 billion.
That's a pretty big deal (worth more than the value of GameStop, American Airlines or Rolls-Royce for context), but for Berkshire's $146bn+ cash pile, it's something of a drop in the ocean.
Good, big, ideas
Every year Warren Buffett has written a letter to shareholders of his conglomerate company Berkshire Hathaway. In 1995, already 30 years into running Berkshire, Buffett wrote that "in the early years, we needed only good ideas, but now we need good big ideas". That sentiment was true then, and it's only become more true.
As Berkshire has grown, the opportunity set has narrowed, and Buffett and co. have had to remain disciplined in their hunt for bargains, leading to a growing cash pile on the company's balance sheet.
No bankers allowed
In classic Buffett style, he managed to telegraph his dislike for Wall Street's bankers during the deal. He offered $850 a share, but wanted a refund for the fee reserved for the investment bank representing Alleghany — which was Goldman Sachs. The result? A final price of $848.02 per share, saving Berkshire $27m in total.
