Even with a little tweaking to the Miller-Modligliani equivalence that is a bedrock of finance, that's a solid concept that really shouldn't be forgotten. Old hands at Berkshire know the problem with it. It's really not a fund, virtual or not. Because the market has accorded Berkshire a price that values it far beyond the combined values of its individual stock positions. I don't look at the company, personally, as a bunch of stock holdings and as separate businesses just as I wouldn't look at Allstate or Chubb as bond mutual funds.
Insurance underwriters carry large portfolios of securities and that's just a fact of the business.
The company's going to invest wherever it can maximize return on marginal invested capital, whether that's in raising a patented breed of jackass or in taking big stakes of publicly-traded companies. To draw a parallel between a fund and Berkshire is totally missing the point. If I wanted to point to Coca-Cola's concentrate manufacturing plants and ascribe all the value of the company to those plants, I could say the company's trading at a big premium to its plant assets. In any case, the company is worth more alive than it is dead, so a breakup analysis is somewhat pointless. I've been thinking of selling part or all of our position in Cisco.