David Rosenthal: belief

Transcript context

…Yup, absolutely. Okay, I don't think there's necessarily scale economies. I mean, maybe you could argue a little bit that the scale of the insurance businesses and the float enables more investing, which enables more operating businesses. Maybe I think that's a little bit of a stretch. It's interesting. Today, I think they actually have diseconomies of scale because they just have too much capital that they need to put to work, but we'll save that for the next episode. I do think this period was the one for the first time where they did realize some economies of scale. There is this nice middle ground where if you're really small, then you can't invest enough money to have sharp elbows on a board. But if you have too much money, then all you can buy is Apple. Nothing else moves the needle for you enough. But during this period in the ‘80s, they had the perfect amount of money where they could be activist investors on boards and throw their weight around, and that would deliver enough return for them to be needle moving.…

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