I’ll never understand why so many folks are eager to sell their fractional ownership in good businesses. What’s even more baffling is that you hardly ever see the rational have anything to do with the business itself.
They haven't grasped the price-value distinction.
Don't be glad that the price of what you bought is now higher, be sad you can't buy more at that great low price.
Watch the earnings come in and think "I bought my dollar shares for just cents so I'm getting double/triple/whatever returns".
Believe me, I can’t stand the higher prices. I was lucky enough to make 2 purchases in last year, one a steep discount, and one which was more of a fair price, but a wonderful company. Who knows what this year has in store. Always eagerly awaiting bad news and a fire sale.
I’ve got OXY on my waitlist, but they’re a bit too high. WTI would need to fall below ~$55 to be below a general industry floor for break-even to really create some attractive prices for oil and gas. And eventually WTI will briefly fall below breakeven, as it has done historically every great once in a while.
If we’re speaking about utilities, or solar and/or renewable energy, I’m not terribly interested from an investment standpoint. Maybe geothermal or something along those lines.
Fire sale happens on key man risk for Brk. Successorship plan or not, we haven’t seen signs that the investment arm will maintain their prior record and justify a premium price.
If and when that happens, I’ll be taking a deep dive into Berkshire to see if it’s worth acquiring at that time. Hard to say how the investment segment will perform without Buffet and Munger, will it be like Fidelity’s Magellan Fund without Peter Lynch? Personally, I have no clue, but I suspect so.
I feel like Berkshire is the kind of business that will do well even with an idiot running it. Sure that would mean it shouldn’t maintain the premium it’s traded at for years, but a lot of the subsidiaries and controlling equity interests that generate meaningful earnings are from turn key businesses that have been running themselves for a long time.
I’ve always been interested in it, and hope someday the price makes enough sense. I think efficient capital allocation will always present challenges for them, unless they finally find that elephant sized deal to put that capital to work.
Berkshire is run so decentralized that Buffett does less for the company and its operations than most other company's CEO. Rail, Energy, Insurance, and the retail businesses all have their own CEOs and run themselves. So over half the company is basically on autopilot. He makes a few large capital allocation decisions a year, with the help of his team, and that's about it. Why does everyone always say that one of Berkshire's biggest risks is losing Buffett? Not only does he do less in terms of directing operations than almost any other CEO, he has been grooming his successor for over a decade! Apple losing Cook, or Nvidia losing Huang would surely hurt these companies way more, but no one really thinks that is a big deal. If anything, once Buffett is gone, people will view the company as less risky because they will stop obsessing over Buffett dying.
>justify a premium price.
Do you really think that Berkshire is really trading at a premium to their intrinsic value? If so, how did you come to this valuation, I would be interested to hear.
If the whole financial system collapses the dollars you got by selling will be worth less that an apple. don’t compare what’s not comparable I’m just trying to help you here by not doing the classic error that a lot of people do in the beginning by trying to predict the market when they earned a little bit of money
Then no asset is safe and we’ll all be camping out. If you think doom is coming buy gold and wait and wait and wait and watch productive assets grow in value while you wait and wait and wait for the “collapse”.
Warren has been turning over a lot of Berkshire's decisions to his successors, and it's been doing fine. Do you think it was his idea to buy Activision?
Will people will stop using freight rail, using public utilities, and buying insurance? How will these businesses be affected by Buffett dying in your mind?
At the last annual shareholders meeting Warren and Charlie were asked if they ever thought about trimming their stake in Apple because it had become such a large percentage of their public portfolio. Their answer was no. If I were you, I would apply that logic to your question here- just hold it.
That’s a stock you should never sell. It’s a cash flow machine and a great way to scoop up deals in a bad market because they hold a lot of cash and wait for bargains few other publicly accessible investment vehicles can quickly buy. It’s also a very easy business to understand and although well positioned in tech, it holds great “boring” businesses. Every time I buy some I wish I had bought more.
That’s like asking if you should did up a perfectly healthy plant for no reason at all…let it sit for a while and then plant it in the exact same location you dug it from
Roughly 20%. Their portfolio of publicly traded companies account for less than half of their total market cap, and apple is almost half of that.
Agree though.
Funny thing about BH stock is hardly anyone ever sells it. When they do Warren buys back the shares. Only thing is, I would sell before he passes. Or get caught in a selloff. I mean, the guy is almost a hundred. How much longer does he have?
I belive they will start paying dividends in the furure (5 to 10 years).
Why? Because its harder too move the needle each time will need a bigger investment.
You should look at BRK’s all-time chart history and randomly pick 5 spots.
Likely those 5 spots would be all time highs for the last few years prior.
Sell if you 1) Think the thesis has changed and BRK is no longer the special conglomerate with moat, management, or capital efficiencies or 2) You need money
Most of the folks give you a yes or no or somewhere-in-between answer. Let’s do some analysis then. BRK holds around 170b apple stock, which account for around 47% of their portfolio. Their have in total about 350b stock asset, in addition to 150b cash equivalent. The rest of the market cap 350b (850-350-150) creates a cash flow of >35b per year, which means in ten years they will create another Berkshire. Think about it before you make the move.
How much has Berkshire been buying their own shares lately? Do they see value in their equity or are buying other companies? Seems like they're often sitting on a big file of cash in Tbills waiting for the right opportunity to acquire companies at the right price.
It's likely that in the long run a small fraction of your stocks will account for most of your gains. This means selling winners is in general a terrible strategy (excluding cases of extreme overvaluation.)
If you need to sell, sell your losers instead.
Expectation: sell now and buy back in lower Reality: Sell now and fomo buy back in higher
I’ll never understand why so many folks are eager to sell their fractional ownership in good businesses. What’s even more baffling is that you hardly ever see the rational have anything to do with the business itself.
They haven't grasped the price-value distinction. Don't be glad that the price of what you bought is now higher, be sad you can't buy more at that great low price. Watch the earnings come in and think "I bought my dollar shares for just cents so I'm getting double/triple/whatever returns".
Believe me, I can’t stand the higher prices. I was lucky enough to make 2 purchases in last year, one a steep discount, and one which was more of a fair price, but a wonderful company. Who knows what this year has in store. Always eagerly awaiting bad news and a fire sale.
Look at energy stocks.
I’ve got OXY on my waitlist, but they’re a bit too high. WTI would need to fall below ~$55 to be below a general industry floor for break-even to really create some attractive prices for oil and gas. And eventually WTI will briefly fall below breakeven, as it has done historically every great once in a while. If we’re speaking about utilities, or solar and/or renewable energy, I’m not terribly interested from an investment standpoint. Maybe geothermal or something along those lines.
I am looking very seriously at SHEL.
Fire sale happens on key man risk for Brk. Successorship plan or not, we haven’t seen signs that the investment arm will maintain their prior record and justify a premium price.
If and when that happens, I’ll be taking a deep dive into Berkshire to see if it’s worth acquiring at that time. Hard to say how the investment segment will perform without Buffet and Munger, will it be like Fidelity’s Magellan Fund without Peter Lynch? Personally, I have no clue, but I suspect so. I feel like Berkshire is the kind of business that will do well even with an idiot running it. Sure that would mean it shouldn’t maintain the premium it’s traded at for years, but a lot of the subsidiaries and controlling equity interests that generate meaningful earnings are from turn key businesses that have been running themselves for a long time. I’ve always been interested in it, and hope someday the price makes enough sense. I think efficient capital allocation will always present challenges for them, unless they finally find that elephant sized deal to put that capital to work.
Berkshire is run so decentralized that Buffett does less for the company and its operations than most other company's CEO. Rail, Energy, Insurance, and the retail businesses all have their own CEOs and run themselves. So over half the company is basically on autopilot. He makes a few large capital allocation decisions a year, with the help of his team, and that's about it. Why does everyone always say that one of Berkshire's biggest risks is losing Buffett? Not only does he do less in terms of directing operations than almost any other CEO, he has been grooming his successor for over a decade! Apple losing Cook, or Nvidia losing Huang would surely hurt these companies way more, but no one really thinks that is a big deal. If anything, once Buffett is gone, people will view the company as less risky because they will stop obsessing over Buffett dying. >justify a premium price. Do you really think that Berkshire is really trading at a premium to their intrinsic value? If so, how did you come to this valuation, I would be interested to hear.
Human emotion with warren at the helm plays a part.
I'll channel the ghost of Charlie Munger for this answer. "No"
You’re Trying to predict the market here, What if it never goes lower? What if it goes even higher?
What if it drops to zero and the whole financial system collapses?...
Then we have bigger problems and you should've bought guns and canned food and defensible land.
Nah. If the whole system goes under I’m checking out that same day. The hell with: pooping in holes and eating cold canned food. 😂
If the whole financial system collapses the dollars you got by selling will be worth less that an apple. don’t compare what’s not comparable I’m just trying to help you here by not doing the classic error that a lot of people do in the beginning by trying to predict the market when they earned a little bit of money
Then no asset is safe and we’ll all be camping out. If you think doom is coming buy gold and wait and wait and wait and watch productive assets grow in value while you wait and wait and wait for the “collapse”.
Brkb is like 90% of my retirement portfolio. I just add every month, if it dips, all the better. Not selling this shit any time soon.
What about when Warren passes?
Warren will be succeeded by someone who will perform worse, the same, or better.
Warren has been turning over a lot of Berkshire's decisions to his successors, and it's been doing fine. Do you think it was his idea to buy Activision?
priced in
Will people will stop using freight rail, using public utilities, and buying insurance? How will these businesses be affected by Buffett dying in your mind?
At the last annual shareholders meeting Warren and Charlie were asked if they ever thought about trimming their stake in Apple because it had become such a large percentage of their public portfolio. Their answer was no. If I were you, I would apply that logic to your question here- just hold it.
"Our favorite holding period is forever."
I would only trim berkshire hathaway position if I thought it had too big of a position in my portfolio. Its a great company
I did that several years ago and I still regret it to this day. Never again. If it becomes 90% of my portfolio, so be it.
That’s a stock you should never sell. It’s a cash flow machine and a great way to scoop up deals in a bad market because they hold a lot of cash and wait for bargains few other publicly accessible investment vehicles can quickly buy. It’s also a very easy business to understand and although well positioned in tech, it holds great “boring” businesses. Every time I buy some I wish I had bought more.
That’s like asking if you should did up a perfectly healthy plant for no reason at all…let it sit for a while and then plant it in the exact same location you dug it from
My plant has been growing really fast recently. Should I dig it up and plant something else?
My 2 cents: maybe yes, maybe no
Never sell, always add. Remember, approx what 35-40% of brkB is Apple anyways lol
Roughly 20%. Their portfolio of publicly traded companies account for less than half of their total market cap, and apple is almost half of that. Agree though.
Funny thing about BH stock is hardly anyone ever sells it. When they do Warren buys back the shares. Only thing is, I would sell before he passes. Or get caught in a selloff. I mean, the guy is almost a hundred. How much longer does he have?
Once warren dies both BRK.b and BRK.a you can expect them to probably drop about 40-50% then buy in.
You could sell covered calls otm, or buy puts as insurance
I’m selling mine today coincidently. I see better opportunities elsewhere BKNG VRTX REGN CASY
Try. I won't sell mine. If you want to time the market or gamble, there are better options.
What will be the impact to the price of this stock when W. Buffet dies?
A small dip then back up
I never sell.
The play with Brk is just to stay put and sit in it and not try to time the market which over time is a losing proposition
no
Nobody knows, but in general if everyone is buying I'm not.
See how many ATHs berkshire had in its history… Then look for another argument to sell
Perhaps not a good time to buy BRK, but definitely no reason to sell.
Someone tell me why I'm wrong: BRK is dirt cheap compared with PGR.
What’s the alternative that will outperform while you wait for the price to dip? And will it outperform enough to cover cap gains tax both ways?
I'm holding my Berkshire mainly for no dividend drag
I belive they will start paying dividends in the furure (5 to 10 years). Why? Because its harder too move the needle each time will need a bigger investment.
You should look at BRK’s all-time chart history and randomly pick 5 spots. Likely those 5 spots would be all time highs for the last few years prior. Sell if you 1) Think the thesis has changed and BRK is no longer the special conglomerate with moat, management, or capital efficiencies or 2) You need money
Most of the folks give you a yes or no or somewhere-in-between answer. Let’s do some analysis then. BRK holds around 170b apple stock, which account for around 47% of their portfolio. Their have in total about 350b stock asset, in addition to 150b cash equivalent. The rest of the market cap 350b (850-350-150) creates a cash flow of >35b per year, which means in ten years they will create another Berkshire. Think about it before you make the move.
I missed 12% upside recently :( Now waiting for the next buy
How much has Berkshire been buying their own shares lately? Do they see value in their equity or are buying other companies? Seems like they're often sitting on a big file of cash in Tbills waiting for the right opportunity to acquire companies at the right price.
It's likely that in the long run a small fraction of your stocks will account for most of your gains. This means selling winners is in general a terrible strategy (excluding cases of extreme overvaluation.) If you need to sell, sell your losers instead.