One important lesson learned and shared by Buffett this year, with the shutdown of the textile business, is that capital allocation can be smart on a stand alone basis but lackluster collectively – “just as happens when each person watching a parade decides he can see a little better if he stands on tiptoes”.
Competition destroys ROE on investment.
Another lesson – when liquidating businesses, sale price of equipments can be much lower than the book value of assets, even lower than removal costs.
Buffett also commented that the high valuation in stock market, although makes Berkshire look very profitable, left little opportunity for asset allocation in the future.