But this approach has two big flaws, and it took Charlie Munger to finally point them out to Buffett. First, investing in these companies doesn't scale. As BPL and then Berkshire Hathaway began building more capital, there weren't enough of these types of investments for Buffett. Second, and more importantly, these are merely short-term investments and offer little in the way of actually building a long-term enduring portfolio of stocks and wholly owned businesses.