Retirement portfolio musings

For those who do not follow the Mechanical Investing board, our own Jim Mungofitch posted an excellent piece on managing a retirement portfolio with BRK, QQQE, and the strategic use of an annuity, along with musings on longevity risk and deployment of capital. Well worth the read… I promise.

https://discussion.fool.com/if-you-have-any-thoughts-for-how-bes…

Cathy

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…our own Jim Mungofitch…

Technically I started off over there and only later drifted over here : )
I’m still the new guy here.

I just looked up my oldest post here to see when it was: November 2005, when I’d been a BRK owner for about four years, an MI board reader for seven, and an MI poster for three.

Amusing digression:
My very first post here was asking a clarification about the availability of LEAPS mentioned in an article. How prophetic.
The article is no longer on line, but the Wayback machine has it…a valuation of Berkshire written by some guys named Glenn Tongue & Whitney Tilson.
Again, plus ca change…

They said they owned LEAPS…I’m guessing those were the “SQUARZ”?
They were convertible bonds sold back when it was really rare for fixed income to have negative yields: this was allegedly the first ever.
That’s probably the most bearish signalling that Mr Buffett ever did. P/B was 1.926 the night before the deal closed.
The warrants were good for five years and could be exercised at a price 15% higher.

Jim

11 Likes

Jim,

Thanks for drifting, sharing and another insightful read on retirement options as I have entered this stage. Your posts on Berkshire “annuitization” with a tuning knob in retirement years have been superb and have provided further confidence in my thought process going forward. Thank you!

https://discussion.fool.com/sorta-ot-annuitization-34787422.aspx…

“…So long as a share of Berkshire keeps rising in value at over (say) inflation+6%/year, then one can cash out that much on average without ever reducing the value of the portfolio.
The method proposed automatically cuts the payouts if/when business results falter, though with a
slight lag, so any slowdown in the business becomes a slowdown in withdrawals, not a risk of eating into the capital…”

8 Likes