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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤
No. of Recommendations: 0
analysis of brkb on Fast Money. He said the stock completed its third 9-10 percent sell off in the past year ,the next leg is higher. I taped the presentation but I don’t think I know how to share it here?
No. of Recommendations: 4
No. of Recommendations: 8
Bad idea, selling brkb calls because it was fairly priced at 420 earlier this year. Bought them back and took the loss. So far, Worths call for brkb to rally looks terrific. 🙏 Happy Holidays to all brkb partners and best of Health to Buffett and his loved ones going forward. The most unselfish CEO and control person of a public company in my lifetime. 💕
No. of Recommendations: 0
do others here think this a good time for a new position of BRKB?
No. of Recommendations: 19
do others here think this a good time for a new position of BRKB?
In a word, no. Not particularly.
It's probably an OK time for a hold of over 10 years, since any entry price now will seem good compared to the ending price. But the valuation levels right now are noticeably above the usual, so I'd expect a flattish year or two at some point. You'll almost certainly see better times to buy.
One possibility: Sit on cash for now. Sleep well. Buy the next time it's trading under 1.4 times book per share. (use the highest book per share seen to date, as it can dip temporarily in bear markets). My hunch is that this opportunity will happen soon enough that the entry price will be lower than today's price, and you'll be earning interest between now an then.
But be warned: when things are cheap, the investing world looks bad. It's emotionally difficult to be a buyer when things look bad, so make this plan in advance and stick to it.
I love this saying: You'll make most of your money in bear markets. It just doesn't seem like it at the time.
Jim
No. of Recommendations: 10
Bad idea, selling brkb calls because it was fairly priced at 420 earlier this year. Bought them back and took the loss.
I started writing calls way earlier than that, with a much lower exit price, so you'd think I'd be in a bad way.
But I just plugged along and stuck with it, rolling the calls out to later dates and higher strikes repeatedly, occasionally adding a pinch more. Each roll raises the breakeven. I get no benefit so long as the price is rising, but I make a little money while it's flat and fair bit of money if/when it falls. My weighted average breakeven exit price (counting losses to date) if all my calls were exercised is now $476. Certainly not that high compared to today's price, but much higher than when I started this cycle of writing calls, and an exit price I could live with.
It could still turn out to have been worthwhile. Perhaps. As an example of the potential benefit, if the stock were to settle in around $420 per B share for a while (which would be a pretty normal valuation level these days), I'll have made an extra 8.5% on my long position compared to never having written any calls in this cycle.
Jim
No. of Recommendations: 2
“do others here think this a good time for a new position of BRKB?”
No. What Jim said, plus I know you’ve owned it before and didn’t like the volatility. If anything it’s likely to be more volatile than normal from here.
No. of Recommendations: 9
"It's probably an OK time for a hold of over 10 years, since any entry price now will seem good compared to the ending price. But the valuation levels right now are noticeably above the usual, so I'd expect a flattish year or two at some point. You'll almost certainly see better times to buy.
One possibility: Sit on cash for now. Sleep well. Buy the next time it's trading under 1.4 times book per share. (use the highest book per share seen to date, as it can dip temporarily in bear markets). My hunch is that this opportunity will happen soon enough that the entry price will be lower than today's price, and you'll be earning interest between now an then."
While I think everything you said is perfect. I would offer up a potential middle ground.
Maybe invest a decent chunk of the money now (if you plan to hold for at least 10 years), maybe 20-40%. Then make regular smaller periodic investments (maybe monthly, maybe a few times a year depending upon how much you have to invest), until the price/book ratio drops under 1.4 and then invest the rest.
By making regular periodic investments you smooth out the importance of the entry point in the eventual return. You won't get the best long-term returns, but you won't get the worst either and should do better than average over that timeframe. It also helps if BRK stays about 1.4 book for a real long period of time. Not likely, but not impossible either.
No. of Recommendations: 3
"do others here think this a good time for a new position of BRKB?"
In a word, no. Not particularly.
It's probably an OK time for a hold of over 10 years, since any entry price now will seem good compared to the ending price. But the valuation levels right now are noticeably above the usual, so I'd expect a flattish year or two at some point. You'll almost certainly see better times to buy.
This sounds like a backhanded way to say that BRK is a "hold" (i.e., do not buy, i.e. do not own, i.e. weak "sell").
But be warned: when things are cheap, the investing world looks bad. It's emotionally difficult to be a buyer when things look bad,
Zeelotes once said, "There is no such thing as a BUY signal that doesn't look insane at the time."
No. of Recommendations: 3
This method also helps with minimizing regret, which is important to some folks, like me.
I always buy and sell too early it seems, but I only buy and sell in steps, never all at once in one big chunk. I never get the best price doing this, but I feel less dumb for some reason. 😆
No. of Recommendations: 2
“Maybe invest a decent chunk of the money now (if you plan to hold for at least 10 years), maybe 20-40%. Then make regular smaller periodic investments…”
I actually did this with the bulk of some inheritance money starting in Sept. 2015- invested half in Berkshire immediately, then monthly for 6 months until fully invested. FYI- P/B started 1.3 and ended 1.35 however price Did dip up to 4-5% during those 6 months. I honestly did not dive into P/B back then, I simply knew Berkshire would be a long term holding and wanted to add sooner than later. (FYI, initial A shares were 195K then, return to date +252% gain).
No. of Recommendations: 19
This method also helps with minimizing regret, which is important to some folks, like me.
You can do that with a very simple method: half now, half later. The later part presumably when the valuation level seems better.
If the first half does better you feel like a genius for having bought some right away.
If the second half does better you feel like a genius for having waited.
I use that a lot for things like foreign exchange conversions which are almost completely unpredictable. Good for the goal of "minimize maximum regret".
Jim
