For folks who are skeptical of Todd/ Ted


Clearly, investing millions in your Roth is very different to 1,000 times that amount as part of a team at Berkshire. The opportunity set is very, very different.

My money is still with Todd/Ted/Warren, I just don’t expect much outperformance. Slightly better after-tax returns than SPY and I’d be happy (assuming positive real returns).

I have to add something here, and a different poll would be more instructive, but would be impossible to administer since most of the people answering the poll wouldn’t understand the question.

I would love to see a poll (with a population that understands the question in detail) asking people what they would choose if they want a long-term investment that will allow them to navigate the oddities of the US tax and benefits system with regards to timing year to year income advantageously.

There are two parts to this…
This is a challenge. You constantly battle when you sell something vs when you sit tight, because selling will trigger a tax event.

For ex: I own MA from 2016 and have a 3x gains, can I sell MA on valuation? and end up paying 15% of the value as tax? This is where sometimes I do in the money covered call, fully knowing stock may slide and I will close the option and take that income, now, I have to pay tax only for that income not for my entire capital gains.

Now, my dividend, interest income comes to about 2.5% of my portfolio, that with some selling can easily cover my dream withdrawal of 3%. Note, I am far from retirement, I expect to work for another 10 to 15 years, but if I have to retire tomorrow, I am prepared for that.

Slightly different case, but literally just yesterday I bought (to close) a option that will expire worthless in January so that the capital gain will be in 2023 instead of in 2024. I paid a cent or two for them instead of zero on Jan 19, 2024.

People that are retired often have many opportunities to time their income advantageously, but even people who are still working have some opportunities. The US tax system is particularly odd in this sense. It has all sorts of “cliff” style eligibility levels. For example, if someone wants to purchase a new EV in 2024, they would want to be very sure to keep their joint income below $300,000 so they can be eligible for the $7,500 EV tax credit on many vehicles. The only way to do that, in many cases, is to shift some income from 2024 into 2023 or into 2025. Furthermore, 2025 is the last year of lower income tax rates (due to an old tax law expiring), so sometimes you also want to make sure that as much income as possible is realized in 2023/24/25 rather than in 2026 and later. And then as usual there is the guesswork of what the new tax laws may be as new legislation is passed over time.