⚠ Tied to the Old EconomyModerate threat

A large share of Berkshire's owned businesses sits squarely in the old economy — a freight railroad, a coal-and-gas-heavy utility, manufacturing, housing, retail, energy — and while these are sturdy, cash-generative operations, they are not where the fastest growth or the future of the economy plainly lies. Berkshire has relatively little direct ownership in the software, internet, and other high-growth industries that have driven so much of the market's advance, a gap it has felt as technology reshaped the economy around it.

The danger is twofold. Some of these businesses face slow secular headwinds — the energy operations must navigate a costly decarbonization, freight and manufacturing are exposed to the long shifts of globalization and automation — and as a group they are likely to compound more slowly than the industries Berkshire underweights. A conglomerate anchored in mature sectors can be wonderfully durable and still grow more slowly than the economy's leading edge.

This is a limit on upside rather than a threat to survival, and it comes with compensations: old-economy businesses are often deeply moated, richly cash-generative, and far cheaper than the glamour sectors, which suits Berkshire's temperament and its need to deploy huge sums at sensible prices. But an owner should expect the ballast of mature, cyclical, capital-heavy businesses to keep Berkshire's growth solid and unspectacular, and should not look here for exposure to the industries reshaping the world — in 2025 about $214 billion of Berkshire's revenue came from manufacturing, service and retailing and $49.8 billion from a railroad and utilities.¹