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Could get interesting.

I can’t believe we are going through this unnecessary crap, but here we are. Maybe we can make some money of it somehow?

What are y’all buying tomorrow/next week/month if the SHTF?

What are y’all buying tomorrow/next week/month if the SHTF?

Euros and plane tickets. The S has already HTF, but the splattering has barely begun and they are pumping in more by the hour.

I am waiting for a or rather THE crash to happen since a looong time now, thinking it's quite overdue. Thanks to Berkshire being my core holding I participated on what was going on the last years, otherwise I would have stayed out.

But with the newest developments I am even tempted to reduce my Berkshire holdings a little as I am convinced --- as wrongly several times before --- "the end is nigh" and even closer than before. After all those bull years I last year and this year I am seeing increasing nervousness and volatility in the market, lately mirrored in a S&P chart which looks as eventually gettin that rounded top many here did speak of as the visual change from bull to bear.

All that's needed is a catalyst, an event which gives the masses an excuse to take their profits and run - and a guy with a strange hairdo might provide just that. Bursting bubbles are not nice, wounding many people, really injuring the weak ones. As more as bigger the bubble became. So maybe Trump in the end is doing everybody a favour by providing that catalyst which will let the bubble burst (As before I will probably be wrong this time too).

Berkshire is high, the dollar is high. So maybe it's time to reduce my core holding a little and to convert the $ proceeds into €. The only thing stopping me is that my cash % already is as high as never before and if proceeds from selling Berkshire would be converted in €, those € would earn practically nothing. Maybe buying a proper house instead of living in my tiny shed would be the best usage.

Berkshire is also my core holding, and has been for almost 30 years. I did sell a fairly significant amount of Berkshire last year due to what I thought were some reasonable prices, so I have a big (for me) slug of cash right now. That makes me feel better.

However, I’m a lazy, fairly unsophisticated investor who has just ridden the back of Berkshire specifically and the US system and resilient economy more generally. I worry that this current group in charge could wreck things so badly that it might permanently change the investment environment going forward in a way I don’t understand.

Maybe I will have to throw up my hands and buy crypto! 😆

Berkshire is also my core holding, and has been for almost 30 years. I did sell a fairly significant amount of Berkshire last year due to what I thought were some reasonable prices, so I have a big (for me) slug of cash right now. That makes me feel better.

Same. I sold all the Berkshire we had in tax deferred (about 10% of total). A bit early, of course.

Maybe I will have to throw up my hands and buy crypto! 😆

I still can't get my head around crypto as an investment. Feels like rat-poison.

“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” – Peter Lynch

"More Money Has Been Lost Avoiding Risk Than at the Point of a Gun"

"Until you realize taking a beating is a normal part of long-term investing, you’ll hurt the overall performance of your portfolio.
Staying with your strategy during a pullback is difficult, and it never gets any easier."

"It’s ok to be wrong; it’s staying on the wrong side of the trend that is the problem. And doing that starts with too much beliefs and expectations about what’s going to happen next. "
-- Mike Shell

"When the market finally corrects, observable shifts will begin to occur. There is no need to anticipate, predict, or forecast." -- Chris Ciovacco

"Stop trying to figure out what is going to happen and pay attention to what IS happening & adjust as needed. Paying attention is much easier and more effective than forecasting."



I can't believe having to post these on the BRK board.

Sold a small part of my BRKB last week, just sold all of the rest today. I'm in the UK so I'm just a spectator of US politics now (although obv the UK market will follow if the US market dives).

I bought IGLT (UK gov bonds) with the proceeds, so if the SHTF hopefully it will go up (yield ~4.5%, average maturity ~11 years).

SA

"Stop trying to figure out what is going to happen and pay attention to what IS happening & adjust as needed. Paying attention is much easier and more effective than forecasting."

I can't believe having to post these on the BRK board.

What IS happening? Berkshire and the market are at particularly high valuations. It's fine to take some risk off the table and get an easy 4% nominal return. No political forecasting needed.

Buffett has about a third of Berkshire's market cap in cash.

What IS happening? Berkshire and the market are at particularly high valuations. It's fine to take some risk off the table and get an easy 4% nominal return. No political forecasting needed.

Cash has done nicely for me. For those living outside the US, the recently rising US dollar (typical of any stretch of flight-to-safety) is a nice boost to local purchasing power, at least in a transient way. On a trade weighted basis the US dollar is up about 2.3% from November-December, up 4.5% from levels typical of last spring and summer, and up 8.7% from the low around end September.

Jim

We are saved! The tariff threat is over!

This is why never make any bold moves. I’m always wrong.

For those living outside the US, the recently rising US dollar (typical of any stretch of flight-to-safety) is a nice boost to local purchasing power, at least in a transient way.

As I am in the same situation: What do you have from that? It only matters if you convert the $ cash now in your local currency (€), only then it's real and not just a transient paper gain. This is why I (half) jokingly said I should sell some Berkshire shares, convert the $ proceeds into €, and buy a house for the €. Wrong?

I can't believe having to post these on the BRK board.

It is very easy to make fun of people when they post their honest opinions. Your opinion seems to be, based on the quotes, there will be no correction or the market will go up a lot before a correction so the gains will not be wiped out. Is that your position? Do you have a position? Since you yourself are posting on the Berkshire board and not the index investing board, I assume you're OK with taking a single stock risk. Post why. Don't just sneer.

I can't believe having to post these on the BRK board.
...
It is very easy to make fun of people when they post their honest opinions. Your opinion seems to be, based on the quotes, there will be no correction or the market will go up a lot before a correction so the gains will not be wiped out. Is that your position? Do you have a position?

I don't know, no need to be that harsh on the comments. I took them to be a sensible reminder of the important observation that it is almost never a good idea to sell equities because there is something in the headlines that is concerning. There is *always* something concerning, but even the very worst things rarely show up directly in stock prices. The September 11 attacks closed the market for several trading days, but if you splice the price history together and remove the dates most people can't spot the date.

That being said, there is nothing irrational about selling something you own which is plainly overpriced based on your own analysis. It may or may not be the optimal thing to do depending on taxes, other opportunities, or your own saving/dissaving cycle--but in general it's a rational thing to do. Another quote: When Mr Market is offering you a crazy price for something, it's good to at least consider the offer before turning it down.

If the overpricing happens at the time as some concerning headlines, I'd focus on the prices, not the headlines.

Jim

"I can't believe having to post these on the BRK board."


My quoted comment was because I assumed that the bulk of people posting on the BRK board were more-or-less experienced investors. As such, they'd not be ones who invested emotionally and panicked at the thought of a pullback after a run.



It is very easy to make fun of people when they post their honest opinions. Your opinion seems to be, based on the quotes, there will be no correction or the market will go up a lot before a correction so the gains will not be wiped out. Is that your position?

Not making fun of anybody at all. Merely pointing out a well accepted market truth---that corrections are an integral part of the market. And that “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” – Peter Lynch

I have another dozen or so quotes along the same line from various people, which I didn't post.


Do you have a position? Since you yourself are posting on the Berkshire board and not the index investing board, I assume you're OK with taking a single stock risk. Post why. Don't just sneer.

A position? A position in BRK, yes.

A position in the dictionary sense of "A way of regarding situations or topics etc."? Also yes.
Primarily typified another long series of quotes.
"True bear markets start slowly giving many months to get out as was the case in both 2000 and late 2007 into 2008. Fast declines, or panics typically retrace quickly and are better bought than sold.
Typically, waiting a few weeks here or there to get out when you are talking about a huge correction isn’t meaningful." -- Newfound Research

Jim (mungofitch) has said the same thing for the last 20+ years -- markets top slowly and you have plenty of time to get out. You take the beating of a -5% or -10% drop before the -40% plunge, because MOST 5%-10% drops are just speedbumps and the plunge does not occur.

"Le tourment des précautions l'emporte sur le danger que l'on veut éviter, il vaut mieux s'abandonner à sa destinée" --Napoleon Bonaparte
"The torment of precautions outweighs the danger one wishes to avoid; it is better to abandon one's self to one's destiny." --Napoleon Bonaparte


Since you yourself are posting on the Berkshire board and not the index investing board, I assume you're OK with taking a single stock risk. Post why.

Single stock risk? Not at all. BRK is just one of my many holdings. One of the largest holdings, but only about 8% of our portfolio.

I follow the BRK board because there are some really smart people who post great investing thoughts & techniques here.



Don't just sneer.

Not at all. Don't read something that isn't there. Advising people to not panic isn't a sneer.

“Never take counsel of your fears” -- Stonewall Jackson and/or General George S. Patton.

I can't believe having to post these on the BRK board.
............
Advising people to not panic isn't a sneer.

Ray, you did not advise people to not panic. You told them as you say yourself "a well accepted market truth---that corrections are an integral part of the market" --- as if the same ones have no idea of that, because of that ignorance get out of a market they don't like, and by doing so are making a grave mistake.

Speaking for myself as your post might mostly be caused by one from me: What's a mistake or not can't be judged by the pure numbers alone. This view is too narrow as it doesn't take into account that it's equally important that the way one invests must fit the psychology and mentality of the investor.

Some years ago I came to the conclusion that optimizing returns for me personally is not that important anymore, if I look at a)how much I have and b)how much I need and c)how much longer it must last. That taken a+b+c together most important for me is to avoid a "black swan" event eliminating the majority of my assets, but that I don't have to care whether my portfolio returns a few % more or less a year.

In other words: Yes, apart from my Berkshire holdings I am since now a full year year out of the since then constantly rising market --- but I am out of it in full awareness that to optimize returns I should simply mechanically be fully invested all times (or at least until we are clearly a bear market), ignoring the investors biggest enemy, his emotions. But as I said: Optimizing returns is not everything in investing. The way one invests must fit the person who does invest.


P. S. : Though last year apart from Berkshire stocks I stayed completely out of the rising market I didn't give up anything return-wise by doing something which it seems is not done here, maybe even seen as "heresy": By betting against Berkshire by buying Puts. As I wrote before by repeatedly doing last year I added a full 8% to what my Berkshire shares returned that year (not too shabby as it meant adding 5% to my net assets; this year doing the same again already added 2%).

My quoted comment was because I assumed that the bulk of people posting on the BRK board were more-or-less experienced investors. As such, they'd not be ones who invested emotionally and panicked at the thought of a pullback after a run.
...
Not making fun of anybody at all. ... Don't read something that isn't there. Advising people to not panic isn't a sneer.

I think you make a valid point. Both about not panicking, and about not reading something that isn't there.

But, FWIW, when one makes one's point with quotes, it can come across as very smug or condescending. It is very easy (indeed, the rule) to misread mood and tone in posts and emails. Worse, most people (probably including myself) have a Dunning-Kruger result: they THINK they're good at reading the tone correctly, but manifestly aren't.

Incidentally, that's the reason that I insert smileys so often (which in fact I despise as a style) - to encourage people to appreciate that I am trying to be light hearted, not snarky or mean : )

Jim

apart from my Berkshire holdings I am since now a full year year out of the since then constantly rising market

Oof.
Total returns 1/1/2024 - 12/31/2024:
SPY 25.69%
VTI 24.74%
BRK-B 25.15%

It will take a -20.6% drop to give back that gain.

Yes, I get that once you have "enough" money, staying invested is mainly "running up the score."
Nothing wrong about somebody deciding that enough is enough, that's a person decision.De gustibus non disputandum est.

But that not a decision from fear of a drop, it's an asset allocation decision.

Yeah, when we started to talk about early retirement my wife said, "So it we had $1,000,000 we could withdraw $50,000 a year for 20 years." I said, "Yes, that what the math says." The she said, "Okay, keep investing. Tell me if and when I need to stop buying stuff."


Optimizing returns is not everything in investing. The way one invests must fit the person who does invest.

Yup. I recognize that a lot of people are not in the "running up the score" camp.



maybe even seen as "heresy": By betting against Berkshire by buying Puts.

Yeah, here is when De gustibus non disputandum est comes into play. Almost all of my such plays have turned out to be suboptimal. I tip my hat to those who make it work, but I suck at it.

Me: betting against Berkshire by buying Puts.

Rayvt: Yeah, here is when De gustibus non disputandum est comes into play. Almost all of my such plays have turned out to be suboptimal. I tip my hat to those who make it work, but I suck at it.

Ray, whether it was Tesla or SaaS stocks, I nearly always was wrong with puts. The only exception is Berkshire, thanks to it's relative predictability of trading in a narrow range Price/PeakBV range, resulting in me just having bought puts again (Apr'17 $460 and $465, for $7 respectively $8.4). We'll see whether that works out :)

“…whether it was Tesla or SaaS stocks, I nearly always was wrong with puts. The only exception is Berkshire…”

Interesting. I’m old fashioned and mainly own stock but have followed Jim’s clear DITM LEAPS calls strategy when Berkshire price was down and out. It was fun & profitable.

I was honestly too antsy the one time I sold covered calls so I bought them back at a loss & realized it was too emotional & unsettling to consider parting with these old shares, realizing emotions should not come into play, but they do wrt Berkshire.

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