Author Topic: Will you sell BRK?  (Read 14796 times)

benchmark

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Will you sell BRK?
« on: October 27, 2012, 09:30:52 AM »
I have held BRK for a while. Given its perpetual 'under value' status, now I'm considering selling it for much cheaper financial stocks, given BAC and AIG are very likely to double in 2 years. However, my BRK was intended for retirement, so there is a psychological barrier to get over. I'm wondering if anyone on the board have thought about (or have done it).


racemize

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Re: Will you sell BRK?
« Reply #1 on: October 27, 2012, 10:13:49 AM »
there's no "no" option!

twacowfca

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Re: Will you sell BRK?
« Reply #2 on: October 27, 2012, 10:27:23 AM »
BRK is the main part of the defensive "security blanket" part of our portfolio.  We'll stick with BRK, or  some combination of BRK and FFH, our other potential defensive pillar, unless Mr. Market coughs up some extreme bargains such as we saw in 2008 or 2009.  :)

benchmark

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Re: Will you sell BRK?
« Reply #3 on: October 27, 2012, 10:34:30 AM »
there's no "no" option!
added, thanks.

mikazo

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Re: Will you sell BRK?
« Reply #4 on: October 27, 2012, 01:24:20 PM »
There's also no option for not owning BRK. Is that a requirement for being on this board?  ;)

Palantir

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Re: Will you sell BRK?
« Reply #5 on: October 27, 2012, 01:36:34 PM »
I think it makes sense to sell BRK, if you have better investment ideas ready to fire. I think the intrinsic value of BRK is about 1.5BV, so there's roughly 20% upside to these shares, and now that a buyback plan is in place, it will no longer be chronically undervalued. I feel like selling from time to time, but I'm going to wait till it hits the 1.5BV mark.
My Portfolio: AMZN, PAGP, FSLR, OKE, PYPL, RHT, MSFT

tombgrt

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Re: Will you sell BRK?
« Reply #6 on: October 27, 2012, 02:02:39 PM »
I think it makes sense to sell BRK, if you have better investment ideas ready to fire. I think the intrinsic value of BRK is about 1.5BV, so there's roughly 20% upside to these shares, and now that a buyback plan is in place, it will no longer be chronically undervalued. I feel like selling from time to time, but I'm going to wait till it hits the 1.5BV mark.

I believe BRK is easily worth 30% more. price/BV is closer to 1.2x atm, maybe 1.25x. The market has underappreciated the excellent safety and high quality this gem offers.

Everyone seems to believe BAC will go up to $20 in a linear way in the next 2-3 years. It might but things rarely go as expected. Given the current market level, uncertainty and lesser quality of BAC and others (nothing can compete with BRK after all...), it can definitely make sense to be heavily positioned in BRK (or FFH for that matter). Not that BAC, AIG, ... aren't great value atm, they just bear much higher risk so they require a higher potential return.

goldfinger

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Re: Will you sell BRK?
« Reply #7 on: October 27, 2012, 02:11:30 PM »
Quote
Everyone seems to believe BAC will go up to $20 in a linear way in the next 2-3 years

Who said that? It will happen sooner or later. I think we are just looking at the earning power and concluding it is worth 20$+.
In the last few years BRK didn't move linearly either by the way!

tombgrt

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Re: Will you sell BRK?
« Reply #8 on: October 27, 2012, 02:27:11 PM »
It is just a general notion I am picking up on, like the 'TBV by Christmas'. "Everyone" and "linear" are to be taken with a grain of salt. ;) I'm just saying it's very unlikely that there isn't going to be plenty of volatility in the next few years so having cash or alternatives makes a lot of sense. Of course, if you don't care for opportunistic trading, then you probably shouldn't care all that much.

augustabound

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Re: Will you sell BRK?
« Reply #9 on: October 27, 2012, 03:44:27 PM »
There's also no option for not owning BRK. Is that a requirement for being on this board?  ;)

You know, in some cultures that's considered blasphemy.   :P
But I'm in the same boat as you.

I was never fully comfortable with the thought of BRKs life after Buffett and Munger.  But from what has been publicized of Ted, I'm getting more comfortable with it.
"Serenity now, insanity later." - Lloyd Braun