Author Topic: Are you a Berkshire Hathaway Inc. investor?  (Read 4704 times)

John Hjorth

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Are you a Berkshire Hathaway Inc. investor?
« on: January 09, 2019, 02:46:46 PM »
Please take the poll. And please feel free to comment the way you like.

Gross position defined as if you use leverage.
« Last Edit: January 09, 2019, 03:13:52 PM by John Hjorth »
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Viking

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Re: Are you a Berkshire Hathaway Inc. investor?
« Reply #1 on: January 09, 2019, 07:00:03 PM »
I recently established a position in BRK. Price is ok; not crazy cheap and not crazy expensive. I like its defensive nature (should outperform when markets sell off again). At current prices, I like Apple and the big US banks; holding BRK gives me some exposure to companies i like for the long term.

Buffett having $100 billion in cash also appeals to me right now; my guess is he will make a couple of large purchases over the next year or two. I would love to see them buy a chunk of GOOG if we get another big sell off.

Main risk is Buffett’s age.

LC

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Re: Are you a Berkshire Hathaway Inc. investor?
« Reply #2 on: January 09, 2019, 07:31:56 PM »
I am in the ~25% bucket.

Picture this (mental exercise, not a prediction):

Buffett and Munger gone.
Existing Berkshire businesses and CEOs continue running their respective businesses as usual.
All excess cash flows are dividended out.
As these existing businesses CEOs retire, etc. they are all sold and proceeds dividended out.
Essentially a slow portfolio runoff of the life work of Warren Buffett and Charlie Munger.

What is Berk worth in that scenario?
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shalab

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Re: Are you a Berkshire Hathaway Inc. investor?
« Reply #3 on: January 09, 2019, 08:38:55 PM »
Six of my family members (other than myself) and several friends are investing in BRK.B in this way - buy or save money to buy 1-2 brk.b share every paycheck for atleast 50 brkb every year. We are comfortable to have up to 50% of our assets in brk.b

Please take the poll. And please feel free to comment the way you like.

Gross position defined as if you use leverage.

John Hjorth

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Re: Are you a Berkshire Hathaway Inc. investor?
« Reply #4 on: January 10, 2019, 04:08:18 AM »
Wow! - 65 votes right now...

This comes to mind:

Quote
Anything and everything to do with our favorite American insurer
”In the race of excellence … there is no finish line.”
-HH Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai

Spekulatius

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Re: Are you a Berkshire Hathaway Inc. investor?
« Reply #5 on: January 10, 2019, 04:10:46 AM »
I agree with Viking that the risk is WEB age. I think the company will be differently run after he is gone. Headquarters will become bigger, because nobody can fill WEb role as a CEO if the holding with such minimal staff and ensure compliance. There is a risk that the culture will change for the worse. I could see BRK getting broken into three pieces (Insurance, Utilities, Industry), but that may not be easy, because the Insurance subs own shares in the other parts as well as the holding company and it may not be able to get the stakes consolidated. BRK is huge and May becoming too large to control for a new CEO. I am in the 5-10% bucket and wouldn’t go higher than 25%. There is always systemic risk that someone, somewhere does something and affects the whole company.
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sleepydragon

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Re: Are you a Berkshire Hathaway Inc. investor?
« Reply #6 on: January 10, 2019, 04:16:21 AM »
I suggest also doing a vote based on the dollar value of the brk holding ..

boilermaker75

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Re: Are you a Berkshire Hathaway Inc. investor?
« Reply #7 on: January 10, 2019, 04:44:30 AM »
John,

What a great idea for a poll! I am really top heavy, 70%, compared to everyone else. The majority of the rest of my portfolio is BK, WFC, and BAC.

With Warren and Charlie gone, BRKB is still going to be generating great cash flow. I am not worried. Paying a large dividend, selling off parts, etc. will just increase the value--at least short term.

Mike

longinvestor

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Re: Are you a Berkshire Hathaway Inc. investor?
« Reply #8 on: January 10, 2019, 06:43:19 AM »
I am in the ~25% bucket.

Picture this (mental exercise, not a prediction):

Buffett and Munger gone.
Existing Berkshire businesses and CEOs continue running their respective businesses as usual.
All excess cash flows are dividended out.
As these existing businesses CEOs retire, etc. they are all sold and proceeds dividended out.
Essentially a slow portfolio runoff of the life work of Warren Buffett and Charlie Munger.

What is Berk worth in that scenario?

An idea triggered by Munger’s comment in the 50th year letter, “The stuff we have now is enough” had me come up with NPV’s of future cash flows under various scenarios; staying flat at current rate for aa decade; growing modestly and then flattening out; and of course  various discount rates. Under all assumptions the price was lower than value. This was in 2015, I think. Berkshire ‘s value has marched on at some of my aggressive assumptions. I plan to do this again this May.

“All that an investor has to do is wake up every morning and see their holding go up in value“- This was one of the fund managers (Russo or Davis) during an interview after the 50th year meeting. Obviously he was talking about the 80’s until now. That sentiment is still intact. Today, if the market doesn’t mark it up to value, buybacks will. Buffett’s age and Berkshire’s size notwithstanding.

TB

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Re: Are you a Berkshire Hathaway Inc. investor?
« Reply #9 on: January 10, 2019, 07:21:25 AM »
WEB has already said he prefers share buyback to paying dividends. I also prefer this as it increases the value to continuing share holders. Furthermore there was a shareholder vote sometime back where 98%+ of all shareholders voted not to have a dividend

John,

What a great idea for a poll! I am really top heavy, 70%, compared to everyone else. The majority of the rest of my portfolio is BK, WFC, and BAC.

With Warren and Charlie gone, BRKB is still going to be generating great cash flow. I am not worried. Paying a large dividend, selling off parts, etc. will just increase the value--at least short term.

Mike