In most cases you should, especially if the financing is uncertain or can be taken away.  Buying a business that can only succeed on leverage is not good idea unless it reaches an illogical extreme low price point.  You could potentially knock AmeriCredit and most every other financial institution for being dependent on their financing. 

Take away the leverage, and Burlington Northern is an okay investment.  The economics of railroads over trucking are great, especially given what could happen in the Far East.  I don’t know if it’s a brilliant investment on its own, but if you can guarantee or figure out a way to fund a huge chunk of the investment at a near-zero interest rate and you are highly confident that the terms and conditions will last for a very long period of time, at least through the repayment of that debt with the cash flows of the company, then you have a heck of an investment. 

Berkshire has really figured out how to behave with large insurance exposures that could potentially pay out billions from catastrophic events.  There is a huge benefit to having so many non-insurance operating businesses affiliated with their insurance businesses, especially large utilities and railroads, where you are highly confident that you are not going to take a big hit.  You can’t have a bunch of operating businesses that could potentially lose much and also face a Katrina or a Wilma.  That’s where you have brilliance.

The last decade has taught investors in public equities that forever is an awfully long time. At some price any investment is a sale, unless you are Berkshire with a big neon sign that says “I love businesses and keep them forever.” 

At some price, a great business becomes a speculation. 

The healthcare industry has been hurt badly by the new administration causing tremendous fear and uncertainty.  It’s not just about investors not going there.  It’s about a fear to reinvest because of an uncertain playing field.  There is always some uncertainty, but it was overdone.  The US government is only capable of writing checks. They do not have the infrastructure or ability to take anything over.  That was pretty obvious. And there are already good public options in Medicare and Medicaid, making the fears overblown.

Healthcare is vital.  I am getting older.  We have a population that wants to live to 100 and tap dance every day to the end.  That costs a lot of money. 

The people who administer our country aren’t stupid, but they can’t figure out how to get it done.  For example, you are not going to have a big success rate replacing a hip if the patient is obese.  If you have someone smoking two packs a day odds are they are going to get lung cancer at some point, and in the last year of their lives those costs are going to be crippling. 

You can’t lower costs when every doctor knows that every bad result is a lottery ticket to the recipient of that bad result, because there hasn’t been tort reform.  Everyone knows that nobody is 100% perfect. Sometimes you are unlucky.  But every doctor has to order every test and do everything possible and behave as if they are going to be sued.  That builds tremendous redundancy into the network.

Then of course, you have crazy rules that bring huge friction into the system.  For example, the government pays much more for hospital beds than private enterprises. 

At the end of the day, if every citizen ended up with the health care policies of our legislators, we would be very happy and we would really be broke.

Union members who have fabulous benefits and are not going to pay Cadillac taxes – these are the people who helped elect the administration.  Every person who receives health care is a voter.  The 65-and-over crowd is very smart and they understand what a public plan would have meant – it would be a lack of choice.

Once tort reform wasn’t touched it was over.  It was not that long ago when the government tried to privatize Medicare – that is how Medicare Advantage came along.  They understood that they can’t just write checks; you need a gatekeeper to try to help people make decisions.

People will probably drive more and take planes less. 

The new management at Hertz is doing a good job at being more efficient.  The business is picking up.

Much of the bargain that we received was not based on the company doing wildly better.  It was based on the price we paid, which was based on the company in their then-current state of business.  We are just coming out of the malaise.  There is plenty of time.

There is Mom, apple pie, and some really great brands.  One of them is Hertz. We paid a good price and people didn’t understand that all Hertz had to do was stop growing and shrink during the recession.  That was all it had to do to survive.

Inflation takes its toll at the end of the day.  You have to take into account the rising costs of goods and services.  The best protection against the possibility of high inflation is to be in good businesses that generate lots of free cash flow and can reinvest that cash at higher rates or can increase pricing or own assets that are very sensitive to inflation, such as St. Joe.

St. Joe owns hundreds of thousands of acres of some of the most beautiful land I have ever seen in the US, including 140 miles of frontage on the Gulf of Mexico and 70 miles of land that touches inland waterways.  The “Redneck Riviera” or “L.A.” [lower Alabama] is unknown because it was very difficult to get to.  The new international airport opening this May opens the Panhandle to the US.  It’s the last large parcel of land in the great income tax-free state of Florida. 

The nice thing about land, is that it appreciates as opposed to a house, which depreciates.