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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.
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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: mungofitch ✹✺🐝 SILVER
SHREWD
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Number: of 22347 
Subject: Re: What Did You Buy Today?
Date: 04/11/25 7:40 AM
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No. of Recommendations: 13
You are misunderstanding. I agree with your post and I wasn't knocking it down. My intention was only to sing the praises of dollar cost averaging for mere mortals who don't know how to build a bottom timing tool!
...
My bad. Agree with the general goodness of DCA.


The habit of long term incremental investment in US equities has been an extremely successful strategy, perhaps the very best one, for a very long time, for a variety of reasons.
And yet...
It is certainly worth considering that not all of those reasons may still obtain, and that the strategy may no longer be the best one.

Ignoring news developments, consider that much of the long run benefit of US equities has come from the rising trend in stock market valuations for many decades. If trend earnings yields can fall at (say) 0.081% per year for 110 years (the on-trend normal P/E rising from 8.3 to 30.8) as they have, what law of nature shows they couldn't fall on trend for the next 110?

I certainly would not bank on a continued rise, which is the implicit assumption built into models looking at historically average returns and trying to extrapolate them or make estimates of optimal equity weightings.

Jim
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This community has written 21,850 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
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