What will kill Warren Buffett or more specifically his insurance operations and wipe out most American Cities?
Answer: Driverless Cars.
Driverless Cars have no active human intervention. Active human intervention is the
leading sole cause of accidents. Humans making bad decisions resulting in accidents. Drunk Driving will stop being a factor. Speeding will become impossible. As a matter of fact Driverless cars will be programmed to follow all aspects of Highway Traffic Act and Municipal Ordinances. So there will be no accidents.
Risk reduces need for expansive auto insurance policies. Consumer starts to save a lot of money. Auto-Insurance companies start to shrink and then disappear. Insurance companies are major buyers of high yielding municipal debt. Politicians with good credit ratings will still go begging but the municipal bond market will dry up.
The driverless car will discipline municipal borrowers. Republicans and Democrats alike will need to cover their bills in another way.
Driverless cars will destroy the blood sucking auto litigation business that feeds so many shyster lawyers. If the accident did not occur there is no lawsuit.
Driverless cars will destroy auto repair shops. Less accidents means less work. Flinty eyed grease monkeys will stop taking money out of your pocket because you do not have as many accidents.
But the big issue is Berkshire Hathaway’s position within the general insurance market. The need for car insurance will lessen dramatically. After all who really likes their insurance agent.
Right no one.
This will be the first time that Berkshire Hathaway will need to go in a fast reverse and exit an investment before it drops dramatically. Everyone will see it coming. Insurance has been such an integral part of Berkshire Hathaway that when they attempt to dispose of it the stock valuation will drop like a stone.
Warren Buffett and associated minions have no experience or perspective with this kind of problem.
George Gutowski writes from a caveat emptor perspective.