Investment Strategies / Index Investing
No. of Recommendations: 8
will never hit one trillion again. :) Actually I read book consisting of shareholder letters from 1965 to 2014. WEB is even smarter than I previously believed. Just hold the damn stock.
No. of Recommendations: 11
Was WB as good as he was because he had CM? How much longer will WB be around? Are the folks remaining as good as he is at deploying capital? The recent slate of posts repeating this mantra to hold the damn stock seem to ignore the idea that BRK is in a major transition.
I will continue to hold the damn stock because the underlying collection of businesses are good. But I will definitely exit if it becomes a company that holds 1/3 of its market cap in cash. I don't see that is good for anyone. Manufacturing your own dividend is nice in concept but what if the underlying stock that you are holding to manufacture that dividend is weighed down by cash that it is unable to deploy at attractive marginal rates of return? Do you have confidence in the post WB leadership to deploy $300B+ and counting productively? If you do, definitely hold the damn stock. But you would have to believe in the BRK culture and "system" to make that logical, rather than rely on your belief in how smart WEB is, I think. If you believe it was WEB genius that made this work, the logical thing would be to question if holding the damn stock continues to make sense.
I hope for one last major bargain acquisition from WEB that could defer the inevitable for some additional years. But its a question of if, not when. WEB may not be around long enough and capital markets can stay irrational long enough such that "when, not if" can not be taken as a given.
No. of Recommendations: 1
Youngandold,
Agree with your point and oulook.
Problem is, if I sell now, what do I buy? Broad US market is 25x P/E with a long-term unsustainable 18% earnings growth per year. I am not Jim, sure it will fall to 3% when I am dead. But still, I would expect 10% optimistically. 25x is too much for that.
Ex-US looks better, and less concentrated in one sector. But not as shareholder-friendly.
At best I can stash some cash under Uncle Sam's mattress and get 4.5% short term (no one knows, but presumably even less in near future). I hope post-WEB management can achieve at least that much if not 1.5-2x book value growth and maintain an average of 1.4 P/B. Mediocre but safer (ignoring specific stock risk like Abel turning into Sokol or Jack Ma).
Suggestions welcome on what to do with the money after selling Berkshire.
No. of Recommendations: 23
Problem is, if I sell now, what do I buy? Broad US market is 25x P/E with a long-term unsustainable 18% earnings growth per year (..) Ex-US looks better, and less concentrated in one sector. But not as shareholder-friendly. I have written about this on the Index Investing board today. You don't even need international diversification to avoid the overpriced S&P500. Just avoid the large caps:
https://www.shrewdm.com/MB?pid=515672466- Manlobbi
No. of Recommendations: 1
Julian, this is extremely helpful!
I made a big mistake by selling in Feb for 1/2 of my BRK shares covered $430 Jan'25 calls. Thanks to several posts here it's clear they will definitely be executed if BRK-B doesn't fall below $430 until the end of the year (and buying them back at least currently is too expensive), with me having no idea what to do then with the proceeds. This is a really good one. Thank you!
No. of Recommendations: 0
But I will definitely exit if it becomes a company that holds 1/3 of its market cap in cash.
I think perhaps more than 1/3 of market cap is in cash right now.
No. of Recommendations: 5
Funny bc I bought some DITM IJR 1/15/2027 LEAPs this morning BEFORE reading this post.
Nice to see Manlobbi likes IJR as well.
No. of Recommendations: 4
Funny bc I bought some DITM IJR 1/15/2027 LEAPs this morning BEFORE reading this post.
That would be the 60 strike? That (qty 4) and the 65 (qty 1) are all that show up for today.
Not bad, I get implied interest rate of 1.47%.
Last week I got XLE at 0.91%.
These seem like really good rates. 2 1/4 years out.
The best I get on BRK-B is 4.42% for the Dec'26 210.
No. of Recommendations: 1
That would be the 60 strike? That (qty 4) and the 65 (qty 1) are all that show up for today.
Yup, you found me.
No. of Recommendations: 0
" Funny bc I bought some DITM IJR 1/15/2027 LEAPs this morning BEFORE reading this post."
Are you subject to American taxes? What are the tax consequences of buying DITM calls in your country? Thanks.
No. of Recommendations: 0
Are you subject to American taxes?
Yes.
