No. of Recommendations: 31
<<<Buffett might say 90% BRK/10% T-Bills all of the time, but the table says 0% BRK/100% T-Bills when price/value is above the 70th percentile of its range.>>
But Berkshire stock can rise very dramatically from ANY point at any time, and can keep rising for a very long time at any time regardless of valuation. You don’t have to be a long term owner to see this….just a recent 2 year owner experienced this.
So if you sold in the low $400s some time ago at a point of then high valuation… and you’re waiting for undervaluation you might very well have to pay $650 in a few years when it may be very cheap. Who knows? I’ve seen this play out numerous times over the years. Moving OUT of Berkshire or OUT of stocks in general is extremely risky. History works against you big time with passing time.
Listen to Munger, don’t play this game. This is such a simple game—so much easier than your advisor or your business media can afford to tell you. And if you choose to make it hard you will a
likely lose to default do nothing buy and hold. Fact is if you miss just a few days in equities over years—regardless of valuation— you lose a substantial part of the overall return. It’s very risky getting out, you’re also then forcing yourself to make too many other hard decisions. Why?
Unnecessarily interrupting natural compounding is the biggest mistake investors make, per Munger. The key Munger word there imo is “unnecessary”. You need cash this year, next year, you’re 90% invested in BRK and if declined 50%you’d be screwed—that’s NOT unnecessarily interupting compounding. Opportunistic selling to prudently raise liquidity or diversification sure!
But if it’s your brilliant 160 IQ that makes you think you’re smart enough to unnecessarily interrupt compounding …as Buffett advises sell 30 of those IQ points THEY are unnecessary—and I say—stop.
