No. of Recommendations: 25
I have held a concentrated position in Berkshire going back over 25 years. Largely to the detriment of my wealth-building, I have sold off and rebought chunks of Berkshire during this period. While I never did anything terribly rash, I suspect that my dancing in and out was a net loser -- and a meaningful one.
Then 2020 rolled around. I had grown my position to roughly 85% of my net worth over a period of about 5 years. This started to itch me a great deal as the negativity around such a high concentration felt compelling. I won't get into the arguments for why this is a bad idea because you probably know them all well or you wouldn't be on this Board.
So I did a perfectly logical (or illogical) thing and exchanged a large slug of my Berkshire for a variety of index funds including QQEW. Fortunately, I maintained a sizable and concentrated position in Berkshire -- just not quite as concentrated (down to about 50% for those keeping track).
Anyway, to this day I maintain a dollar calculation of precisely how much poorer I am due to this exchange. Now, I appreciate that being wrong does not mean that my logic was faulty. I may have been unlucky, I may have been foolish, I may have been both or none. Either way, I am definitely a lot poorer for following my 2020 instincts.
A sale at these levels is hard to argue against. The market is frothy. Berkshire is frothy. One could argue that the macros are lousy. One could argue that the management transition has risk. There is a high probability that a lower re-entry point will be offered... and a possibility that one won't. Buffett himself has not done anything compelling regarding the stock or the market indicating it's time to buy.
On the other hand, the statements above regarding discipline, focus, understanding, etc... are very much true. Logic can be our friend or our enemy -- and choosing when to start and stop the clock is always a factor as well.
