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> conglomerates are inefficient

It's interesting that you say that on a subthread discussing something Warren Buffet said. Berkshire Hathaway became an efficient conglomerate by acquiring and operating companies that eschewed the very principle we're discussing.

He has addressed that in the past. They are able to work around some of the problems by maintaining a hands off approach to their subsidiaries. There is also an important trust relationship that encourages the subsidiaries to give up "excess" profits to the parent.

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