Hi, Shrewd!        Login  
Shrewd'm.com 
A merry & shrewd investing community
Best Of BRK.ABest OfAll BoardsThe Shrewd’m WeeklyLearn to InvestHow to Become Shrewd
Search
Shrewd'm.com Merry shrewd investors
Search
Best Of BRK.ABest OfAll BoardsThe Shrewd’m WeeklyLearn to InvestHow to Become Shrewd


The week's question
In March 2025, in the thread "Re: OT, out", Umm asked the members: "Do you think it is because America is made up of magical soil that makes businesses based in America magically profitable?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
Answer this questionContinue to Shrewd'mThis note won't appear again
Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
Unthreaded | Threaded | Whole Thread (20) |
Author: mungofitch ✹✺🐝 SILVER
SHREWD
  😊 😞

Number: of 22353 
Subject: Re: Value Fund
Date: 05/17/23 8:21 AM
Post New | Post Reply | Report Post | Recommend It!
No. of Recommendations: 25
My suggestion is QQQE.
(the ETF that tracks the Nasdaq 100 equal weight index)

That's not a conventional suggestion for a "value" fund, but value is mainly a function of what you get for your money, not the style of business.
In this case, based on history, it's a collection of firms that seem to have earnings rising faster than most, meaning lots of future value.
Hence, a value fund.
Remember that this isn't trying to extrapolate the outrageous returns of a few outliers like Amazon or Apple or Google...each firm is forever only 1% of the fund.
The past indicates that the group as a whole tends to do well, measured in the old fashioned way as rising net earnings.

I redid my calculations of what a normal pricing level would be for this ETF.
Based on the average historical valuation based on the trend real earnings of this group, I'd peg the normal price today at about $65.50 to $71.50, with CPI at 303.363.
My best guess of "fair value" is $68, so today's QQQE price of $70.56 is not cheap, but quite reasonable.
Given the historically formidable rate of value growth (trend line about inflation + 8%/year, plus maybe 0.5% dividends), it seems a good pick.

The notion that today's price is reasonable includes the implicit assumption that future years will resemble past somewhat, both in valuation multiples and value growth rates.
Especially since around 2005.
The assumptions could be off by a fair bit and it might still be an above-average fund pick.
This sort of valuation exercise certainly won't have you putting your money into the S&P 500 these days, whether cap weight or equal weight.

Jim
Post New | Post Reply | Report Post | Recommend It!
Print the post
Members reply directly to mungofitch here — and replies get answered. Reading is free; so is joining the conversation. Join Shrewd'm »
This community has written 21,861 posts about Berkshire Hathaway. The article-length ones it recommended most:
BRK: Why Not XOM? · 62 recs · 2024
Second quarter comments · 60 recs · 2023
Berkshire's Profit Contributors · 58 recs · 2023
Summary of 2Q 2026 · 55 recs · 2026
3Q Summary · 53 recs · 2024
Unthreaded | Threaded | Whole Thread (20) |


Announcements
Berkshire Hathaway FAQ
Contact Shrewd'm
Contact the developer of these message boards.

Best Of BRK.A | Best Of | Favourites & Replies | All Boards | Followed Shrewds | Open Questions | Moving a community