Another big part of it is the tax structure of a conglomerate. He is able to take cash out of See's Candies and Daily Queen (where they cannot do any good) and put it into big capital investments in Trains and utility infrastructure -- he can do this tax-free.

If you tried to replicate his strategy, but could not hold 100% of the companies, you'd have to constantly sell stock or collect dividends to do the reinvestment and would incur taxes along the way.