2 Comments

What do you mean by capacity to absorb pretty much unlimited amounts of capital?

Expand full comment
author

OXY's oil & gas business is very capital intensive. If one can assume a certain x% yield for every $1 invested, Berkshire can pour its huge cash reserves into OXY without worrying about excess investment. In smaller businesses (e.g. See's Candies), there are diminishing returns on investing excess capital into the business.

Expand full comment