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Seems like an odd pick for Warren
"Berkshire boosts stakes in Japan's five biggest trading houses"
"TOKYO (Reuters) -Berkshire Hathaway Inc, run by billionaire Warren Buffett, has raised its stakes in each of Japan's five biggest trading houses by at least 1 percentage point to more than 6%, regulatory filings showed on Monday, sending shares higher.
The move is line with Berkshire's statement in 2020 that its investments in the Japanese trading houses were for the long term and the stakes could rise to 9.9%.
Berkshire's stakes have increased to 6.59% from 5.04% in Mitsubishi Corp, to 6.62% from 5.03% in Mitsui & Co Ltd, to 6.21% from 5.02% in Itochu Corp, to 6.75% from 5.06% in Marubeni Corp and to 6.57% from 5.04% in Sumitomo Corp.
The news boosted shares of the five trading houses, led by Mitsubishi and Marubeni, which were up about 2% against a nearly flat benchmark Nikkei average."
https://finance.yahoo.com/news/buffetts-berkshire-boosts-stakes-japans-010320683.html
"Berkshire Hathaway Is Now A Utility Company." Forget Dairy Queen and Sees Candies, and about 90 of the 100+ BRK holdings including perhaps the 14 or so insurance companies. This is something I've been saying for quite awhile and especially after Buffett's brilliant 2022 OXY buys. Energy is Buffett's legacy and future.
"Article Summary from SA
* Berkshire Hathaway has a unique portfolio of assets that remains undervalued as highlighted through continued share repurchases.
* The energy business is essential for the company. It remains volatile presenting new opportunities and can consume massive capital.
* The business represents the largest source of the company's earnings and we expect that growth to continue"
https://seekingalpha.com/article/4554211-berkshire-hathaway-now-utility-company.
Did you take that directly from Investor's Business Daily or Dorsey Wright?
You really should use quotes when you are taking someone else's information.
I'm going to debate a few of your points.
There have been techno and dyno funds and still are.
I've made much of my wealth via various sources of technical analysis over the last 30 years of investing. I find fundamental analysis typically to be too late.
I'm willing to bet a sizable chunk that I'm wealthier than you. Although, I guess I've never communicated with that particular person.
You'll learn technical analysis is rubbish. Since you posted that BRK "has no buy point," it is up about 8%. Charting sells books and it sells TA courses and brokers love it because it encourages over-trading which profits brokers.
How come there are no TA mutual funds? No "Vanguard Technical Analysis Fund," No "Fidelity Charting fund.?" There use to be some but they went out of business when they lagged terribly.
BTW, I'm probably the wealthiest person to have ever communicated with you online.
"Just reclaimed its 50-day moving average, a bullish sign." You need to phone Warren about that. He probably hasn't followed that stuff since he doesn't even have a computer on his desk in Omaha. Anyway, T/A is baloney, akin to tea leaf reading, but it sells courses and books, and it drives trading that profits brokers.
Buffett's Office:
Berkshire Hathaway stock currently has no buy point in sight, BRKB has just reclaimed its 50-day moving average, a bullish sign. It is now trying to reach its longer-term 200-day line. Berkshire stock currently sits 1.5% below this level. The relative strength line was choppy after a strong start to 2022, but is perking up again. This gauges a stock's performance compared to the broader S&P 500. Its Relative Strength Rating of 71 means it has outperformed 71% of stocks in terms of price performance over the past 12 months.
BRKB stock is fractionally negative since the start of 2022. This is better than the S&P 500's decline of nearly 19% over that period however. All-around performance is not ideal. This is reflected in its IBD Composite Rating of 73 out of 99.
Berkshire Hathaway stock currently has no buy point in sight, BRKB has just reclaimed its 50-day moving average, a bullish sign. It is now trying to reach its longer-term 200-day line. Berkshire stock currently sits 1.5% below this level. The relative strength line was choppy after a strong start to 2022, but is perking up again. This gauges a stock's performance compared to the broader S&P 500. Its Relative Strength Rating of 71 means it has outperformed 71% of stocks in terms of price performance over the past 12 months.
BRKB stock is fractionally negative since the start of 2022. This is better than the S&P 500's decline of nearly 19% over that period however. All-around performance is not ideal. This is reflected in its IBD Composite Rating of 73 out of 99.
It's trading in a channel right now. Above $454,000 would be a nice breakout.
“Investing is art — not a science.” Nope. There's a ton of science in smart, consistent, investing. At least that's been my personal experience for about 35 years
https://www.getrichslowly.org/history-of-index-funds/
My one son has moved to highly taxed California for a time. I'm thinking of buying him some BRK as a good tax-efficient investment while he's out there.
Seems pretty certain that new management, in whatever form, will be paid vastly more than the $100,000 Warren and Charlie each take home annually. Vice Chairman, Greg Abel, is already very well paid in terms of salary.
Even with billions in investments, the Boyz are doing just fine, one of my very best holdings lately. And up 3% today
I think we both would agree that much of Warren's success was his actions based on gut feel. Of course Charlie had his as well. You can teach someone to fish, but this doesn't mean they will know the exact same holes to select that you would.
Add this to my belief that shareholders act emotionally, and I believe the stock just won't be the same after.
"Buffett’s Likely Successor Buys $68 Million of Berkshire Stock"
"Berkshire Hathaway BRK +2.16% Vice Chairman Greg Abel, the likely successor to CEO Warren Buffett, bought about $68 million of the company’s shares last Thursday in what appears to be his first purchases of Berkshire stock since he assumed the position in 2018.
"In several Form 4 filings Monday with the Securities and Exchange Commission, Abel disclosed that he purchased 168 Berkshire Hathaway Class A shares through the Gregory Abel Revocable Trust on behalf of his wife, children, and other family members."
https://www.barrons.com/articles/berkshire-hathaway-greg-abel-stock-warren-buffett-51664834938?siteid=yhoof2
I get that, but then again, companies like AIG (which was at the time just 1 of 5 AAA rated companies), had to get a bail out from the government .
Insurance companies work because most of the population doesn't die at once. Imagine if it did. Now, once again, how does this differ from a Ponzi scheme?
I'm not trying to call out all insurance companies, I just want someone to explain to me how it differs.
That's one reason I own stock in many insurers, Travelers and the dozen or so owned by BRK
Again, I'm giving you answers directly from a major insurance company. There are thousands of $10000 policies that were fully funded years ago, but either the owners forgot they owned them, or never mentioned it to their heirs.
The insurance companies make no effort to track down the beneficiaries.
There is the rub, "legitimate" is a subjective term. I'm not saying that insurance companies are stealing your money, but in essence, they are.
The fees charged have come way down, which would have strongly influenced returns compared to the DJ.
Actually very, very few term policies pay out, but in almost all cases payments have stopped being made. I had a term policy I paid on for 25 years, I let it lapse which was the smart thing to do. No longer had young kids. Very common. I knew the odds; I was betting on my good health.
If I had died, you can bet it would have been collected on or at least escheated to the state.
A wonderful, easy read. "A Brief History Of Dividend Growth Investing."
Starting with the Dutch East India Company (the VOC) in 1602 which generally paid dividends, in cash but often goods, till ~1782.
https://seekingalpha.com/article/4079778-brief-history-of-dividend-growth-investing
With legitimate insurance the use of the money is fully spelled out, and is usually regulated by state insurance auditors. Madoff was a pure and simple scam.
"I was told." I have no idea what he "was told"
My local newspaper had a very active "stock" page going back to around 1900, at least. Most stocks were rails, not many industrials. I spotted Rockefeller's Standard Oil for example. The most traded stocks were shown on Page One.
There's a young guy named Jamie Catherwood who does a fantastic site on stock market history https://investoramnesia.com/
It has links to many old and very hard to find books on stocks going back hundreds of years, and much of that old stuff still has value.
One of my favorite is this study from 1933:
"90 years ago he showed stock forecasting was BS:
--
"Born in Chicago in 1891 and educated at Yale, Cowles became a successful businessman. But his true passions were economics and statistics. One question in particular exercised his mind — is it possible to beat the stock market? — and in 1927 he set out to find the answer.
Over a period of four-and-a-half years, Cowles collected information on the equity investments made by the big financial institutions of the day as well as on the recommendations of market forecasters in the media. There were no index funds at the time, but he compared the performance of both the professionals and the forecasters with the returns delivered by the Dow Jones Industrial Average.
His findings were published in 1933 in the journal Econometrica, in a paper entitled Can Stock Market Forecasters Forecast? The financial institutions, he found, produced returns that were 1.20% a year worse than the DJIA; the media forecasters trailed the index by a massive 4% a year.
“A review of these tests,” he concluded, “indicates that the most successful records are little, if any, better than what might be expected to result from pure chance.”
https://www.evidenceinvestor.com/cowles-forecasters-cant-forecast/
HA! I've been told that around 40% of all term policies go unclaimed. I could tell some stories, but I won't.
BTW, Bernie Madoff was highly regulated as well.
The difference fung, as that with insurance it is a matter of an enforceable contract, and the insurance industry is highly regulated. Whether it is Life Insurance, Auto insurance, home Insurance or personal liability, you pay for the insurance coverage and the insurance company is contractually obligated to pay for your losses if they occur. Hardly a ponzi scheme.
One day perhaps someone can explain to me how insurance differs from Ponzi schemes. I told that to an insurance Exec once and it really pissed him off.
They both collect your money and may or may not one day pay you off with someone else's money. Meanwhile, they are using your money for their gain.
You need to keep in mind that there really wasn't a broad trading world until around the 1970's. While mutual funds started I believe it was 1925, most average working Joe couldn't afford them and had no understanding of them.
!925: The investing world discovers retained earnings.
That "discovery" is akin to the investing world's discovery of "dividend growth investing" that may have been driven by Edgar Lawrence Smith's 1924 book, "Common Stocks as Long Term Investments."
Smith's little book introduced the then-radical notion that a portfolio of common stocks outperform bonds over the long term, and were thus LESS risky than bonds. The book came into prominence when John Maynard Keynes reviewed it favorably in 1925. Keynes emphasized the role of "retained earnings" in the success of stocks over bonds.
Why did it take hundreds of years for the broad investing world to figure that out?
Keynes Reviews “Common Stocks as Long Term Investments.”
https://novelinvestor.com/keynes-reviews-common-stocks-as-long-term-investments/
And this important WSJ piece
The Fund That Does a Lot by Doing Nothing - WSJ
"Voya Corporate Leaders Trust hasn’t made a major change to its portfolio since 1935, but it’s still going strong:
https://www.wsj.com/articles/the-fund-that-does-a-lot-by-doing-nothing-11576854661
I've posted this important research several times since it came out, but always worthwhile to read and save
"The Academic Paper That Explains Warren Buffett's Investment Success"
https://www.forbes.com/sites/timworstall/2013/12/03/the-academic-paper-that-explains-warren-buffetts-investment-success/?sh=77b41d72dd8f
Well, I'd agree, but then with mutual funds, you create a massive tax situations that screws over the new investors.
For instance, American Funds and Fidelity were both huge buyers on Amazon's IPO, and still hold most of the shares. So, how do they sell it?
A) it can tank the stock price since they own so much of the company
B) it will be a massive tax gain that gets passed on at the end of the year to investors.
I'd say, one of the biggest benefits to Berkshire over mutual funds are it's favorable reporting regs.
Nope, BRK's success is mostly tied to the free leverage from its insurance holdings and the fact that Buffett is damn unique in not chasing fads and in not panicking. Buffett is the exact opposite of an Ihubber.
Most investment funds would perform better with less portfolio turnover. Heck even BRK would likely do better with less trading (ask Munger about that).
BTW, I do find it interesting that even American Funds, which are the granddaddy of all mutual fund companies, has moved their focus to ETFs now for tax reasons.
My problem with ETF's that don't exactly track an Index, is the amount of money put in their pockets in between.
I've owned a few ETF's that are supposed to track an index, but somehow don't.
In many cases, ETF's are Hedge funds in drag.
With that said, I've done well with PKW for a while now.
Maybe....I remember when Peter Lynch left Fidelity Magellan, then Jeff Vinik came in and did well, then he left and Stanksy came in and the fund tanked. Same happened when George Vanderheiden left.
Sometimes, things that seem automatic, just aren't.
Much of Berkshire's value is tied to Warren Buffet's name(and connections), no matter who is working in the background.
In Finviz, I closely track about 9 indexes and ETFs ranging from microcaps to mega-caps. NOBL is down the least of them at 10.2% YTD and that doesn't count the fat dividends. I wasn't happy that my son bought it without consulting me. NOBL is too conservative for a young kid in a high tax bracket who should be avoiding highly taxed dividends. Still, It worked out great this year.
Note that QQQ is off 25.6% this year.
That son has also owned SPY and QQQ for many years.
Exactly! Can you say "HUGE BUYING OPPORTUNITY"?
My concern over Warren's passing, isn't what might actually happen, but more about perceived value and how many people would sell immediately.
Yeah, I bought some NOBL back in July last year. Down about 6%, but could be worse. I'm not a big fan of ETF's, just don't trust them.
Yes, my son owns NOBL, the S&P 500 Dividend Aristocrat ETF which has outperformed virtually everything in 2022. Over a longer period it has lagged somewhat, but still a great safe holding especially during tough time.
https://seekingalpha.com/article/4536816-nobl-vs-schd-which-is-the-better-dividend-fund
If you were Buffett/Munger running one of the world's most efficient businesses -- with only 25 employees in the HQ office -- would you want the office phone ringing all day with small time day traders asking about splits and trivial press events to pop the stock a few pennies????
99.9% of SH questions can be answered in minutes by skimming the 10K and other filings. Same thing about the famous SHM held every year around May 1.
The 2nd share class was created years ago prior to the BNSF acquisition so BRK wouldn't have to spend a lot of cash buying fractional shares. Also Buffett didn't want to see the creation of single stock mutual funds, a very inefficient way for small investors to get into BRK. I've written on IHUB about that complicated saga.
https://www.investopedia.com/ask/answers/021615/what-difference-between-berkshire-hathaways-class-and-class-b-shares.asp
LOL, seriously??
I don't think you are correct....
I'm unusual among IHUBers in that I like low (or even no) dividend stocks for me and my kids. Both kids are single and making pretty good income for their ages. One kid has moved to California for a time with the high taxes that entails.
BRK is quite different than any mutual fund. For example, many of its holdings are wholly or mostly owned (like Dairy Queen or BNSF) and some don't trade on US exchanges.
I tend to consider WB and Charlie to be my "stock brokers", especially after the death of Vanguard's John Bogle.
There has never been any form of split in the B shares. They have always been tied to 1/1500th of an A share. As for when Warren passes, the company should not skip a beat. There has been a lot of work and thought put into the succession plan. Greg Abel is quite ready to assume the CEO role, and Howard Buffett will become Chair. Howard is very accomplished in his own right and was very successful in going off and doing his own thing and succeeding on his own.
Most importantly, a number of years back now, Warren brought in 2 of the greatest investment managers and minds in the business, Ted Weschler and Todd Combs, and began to slowly turn over more and more of the investment decisions to the 2 of them They both love Omaha and have became very comfortable and successful in their roles working with Warren, etc, and the two of them will take over the remainder of the investment functions, i.e. all of the investment function when Warren is gone. I specifically recall thinking what a master stroke it was when Warren brought Ted and Todd in. It was brilliant. If BRK's share price falls considerably when Warren Buffett dies, it will be an incredible buying opportunity for astute investors, and you should fire away on building a large position. I know I will be adding to my current positions if that happens.
I owned 11 shares of the B shares shortly after they came out, but sold long ago. Guess they've gone through a big stock split since. Thought I recalled paying $1000 a share??
I got rid of them years ago over concern what would happen if Warren were to pass away. I know there's a plan in place, but can't help thinking the share price will suffer.
I don't think it's a great idea for your kids unless it's in an IRA you're setting up for them.
FWIW, BRK has become much like American Funds mutual funds. Started off as pure value investments, but eventually turned into growth.
I do own large positions though in many of the stocks inside of BRK.
Are you in BRK? I keep thinking of buying some for my kids, but I own a fair amount of the B shares.
Well.....SOMEONE'S gonna have to do it after Warren is gone! I guess I could find the time.
One other thing. BRK-B has far less voting power than BRK-A, something to think about if you're planning to take over control of the company.
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Berkshire Hathaway, Inc NYSE: Symbols BRK-A Class A shares BRK-B Class B shares | Berkshire Hathaway, which began in 1839 as a textile mill, neared collapse in 1962 when 32-year old Warren Buffett started buying control in the belief the company could be saved. Buffett initially maintained Berkshire’s textile business, but by 1967, he was expanding into other investments. Berkshire bought stock in the Government Employees Insurance Company (GEICO) that now forms the core of its colossal insurance operations. Other early acquisitions included See's Candies, Blue Chip Trading Stamps and Dairy Queen. BRK moved from the OTC to the NYSE in 1988. Today Berkshire is a combination of 66 wholly owned subsidiaries such as the BNSF Railroad and 47 passive minority investments, notably its huge stake in Apple. As of 2021, BRK has a market cap of >$600 billion and 360,000 employees. Berkshire Hathaway is the nation's 7th largest business. |
Useful Links Berkshire Subsidiary Companies Buffett's Famous Annual Letters BRK Portfolio Tracker CNBC Buffett Archive http://www.BerkshireHathaway.com/ Buffett's office in Omaha. His desk has no computer Headquarters Address 3555 Farnam Street Omaha, NE 68131 a | |
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