No. of Recommendations: 1
...at a time which might resemble the .com hype, followed by it´s crash, and how to prepare for it:
https://archive.ph/nLDYKA) This
Some of the most effective hedging strategies the Goldman analysts found ... combinations of stocks and non-bond diversifiers. In fact, the best diversifiers were mostly filtered baskets of stocks, such as the S&P 500 “low volatility” subindex, which includes the 100 least volatile stocks in the main index. A 50/50 split between this and the S&P 500 would, from 1996 to 2002, have generated nearly twice the annualised excess returns (over cash) of the S&P 500 index alone.I think wouldn´t apply to Berkshire, with it´s wild swings over the last 2 years.
B) This
So would a similar split with the S&P 500 “dividend aristocrats” index, which includes only companies that have increased their dividends every year for the past 25.definitely not - though some here wish it would be the case.
C) At least here
Diversifying into “quality” stocks (with high returns on equity, stable earnings and low net debt) would have brought similar returns.we can have some hope to survive :)
No. of Recommendations: 20
A 50/50 split between this and the S&P 500 would, from 1996 to 2002, have generated nearly twice the annualised excess returns (over cash) of the S&P 500 index alone.
Interesting observations, though it might be worth remembering Goodhart's Law: “When a measure becomes a target, it ceases to be a good measure.”
There is a LOT of money targeting constant volatility and similar models these days, which is starting to have some perverse side effects. And the Dividend Aristocrats became a great place to find some dead-enders once they figured out they could get into that index by making trivial dividend increases regularly. The current crop has median 10-year sales growth per share of only 4%, so I wouldn't buy the whole set. For about a fifth of them, dividends have not risen as fast as inflation in the last 5 years.
Jim
No. of Recommendations: 14
I think wouldn´t apply to Berkshire, with it´s wild swings over the last 2 years.
Wild swings? In the last two years BRKB has swung between 400 and 540. It's now at 508 and it's been above 450 for all of the last 12 months. If you draw a linear trend line through the last two years of stock prices, you'll find that it has not swung much at all. Try comparing that to the really volatile stocks in the S&P.
Elan
