Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
No. of Recommendations: 10
The trend goes back a number of years. Every time BRK hits an all time high we have a slew of "I lightened up some" posts. Boggles the mind how much $ has been left on the table.
Justified by some with, "Warren's not buying" as if the BRK buyback policy has been the definitive signal as to when to buy and sell the stock. Go back to when the buyback authorization was first announced....believe it started with the ridiculously low 1X book and then after a period of few (if any) buyback opportunities it was increased to a ridiculously low 1.1X book (maybe 1.2). Bottom line is that there was a long period of time with only a small % of stock repurchased even though there was an abundance of cash to do so and of course the stock is worth considerably more today.
No. of Recommendations: 26
Boggles the mind how much $ has been left on the table.
Well, just for the record, I've never not managed to buy back again lower after lightening up. My return from Berkshire over the last 24 years is far more than buy and hold, even without counting any benefit from leverage from calls. So I'm taking money from the table, not leaving it.
I'm not saying my approach is suitable for everyone, as temperament and time-and-attention and tax considerations matter a lot in the real world. For me, holding a fully sized position with no logically expected return in the next year or two isn't a thing that makes a lot of sense. A lot of people hear that investment involves "buy low, sell high", but forget the second half. And besides, there are other fish in the sea.*
I certainly agree that "buy and hold" makes an enormous amount of sense a lot of the time for a lot of people, but not so much that one would mock those who do otherwise and make more money thereby.
Jim
* I doubt many folks have noticed that despite Berkshire's pop, Hershey's stock has still done better this month. Dollar General too. To every thing there is a season.
No. of Recommendations: 17
I certainly agree that "buy and hold" makes an enormous amount of sense a lot of the time for a lot of people, but not so much that one would mock those who do otherwise and make more money thereby.
No mocking by me. Just respect for those who can do it well over time.
Somehow I'm reminded of an interview with Warren's first wife - not long before her sudden passing. IIRC, she was asked about why Warren keeps involved in making money at his age. She replied something like - Warren doesn't do it for the money. It's just his way of keeping score.
For those who can play the game well for a long time, it must be great fun. Warren seems to think so.
I'm very glad he does. And that Jim shares his insights, ups, and downs with us as he also plays the game very well.
No. of Recommendations: 0
Well, just for the record, I've never not managed to buy back again lower after lightening up. My return from Berkshire over the last 24 years is far more than buy and hold, even without counting any benefit from leverage from calls. So I'm taking money from the table, not leaving it.
Have you lightened up recently on the run-up to $500 per b-share? I'm certainly down on my covered calls.
R:
