Right but if you follow the theory if you had alpha greater than fees then you could essentially control all funds available for management (up to the scale where your atrategies stop working). Which is sort of its own reductio ab absurdum.
Berkshire Hathaway did well to begin with, but Warren Buffet is able to get really good deals buying companies because he has a reputation as a good manager. Since he is easy to work with, founders sell cheaper.
>Since he is easy to work with, founders sell cheaper.
This requires a source. Many of the companies he purchases are public companies. If they are selling "cheaper" because they like Mr. Buffet, there's a problem.
The important Berkshire acquisitions are entire companies, most of the time private. Sometimes they were public at one point but were taken private before BRK bought them. (ex: Duracell). Sometimes they were public at the point Berkshire bought them (ex: BNSF) but this seems to be the exception.[1]
The public stock acquisitions that they talk about on the 13-F are really a minority of Berkshire's activity, but sometimes he really does get a better price because he's willing and able to negotiate weird deals like the Bank of America warrants.
