https://www.ft.com/content/c519e5d5-f4c3-4554-9484-ddca75cf9…
Detroit the overall market outside profitless stocks and crypto, and particularly Berkshire’s stock price, haven’t moved such that endless dramatic posts are warranted. A tad of lesser intensity is something I suggest to you, just calm down and think a little.
You always have time and opportunities to buy stocks at reasonable prices. Remember the world didn’t begin in 2017 as the superstar Saul of Saul’s board suggests. Should be go back a few years in market price to start again isn’t a collapse of the world markets.
Berkshire at $276 the greatest entry price ever? No, not even close. My best guess is that we’ll have years and years of being able to buy stocks at reasonable prices to get reasonable returns. Today doesn’t warrant the adrenaline rush, not even close.
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LOL
No Clue
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MBS market stopped trading 2 days ago
ECB holding emergency meeting
Japan announce YCC
US Consumer sentiment plunged in June, to the lowest level on record since survey data started in 1952.
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Pessimism abounds. Negativity always sounds so smart.
If Buffett was buying back BRKB as fast as he could at 280, it likely is a reasonable investment over any long term period. Just remember if you wouldn’t hold a stock for 10 years, you shouldn’t own it for 10 minutes.
If you are a doom and gloomer, and predict the end of the USA and capitalism, then I have no suggestions…
“If you are a doom and gloomer, and predict the end of the USA and capitalism, then I have no suggestions…”
Amen
Two suggestions come to mind:
-
Build a bunker
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Get a dog if you are scared.
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DetroitBadBoy rudely posted in response to chompin’s words of wisdom:
LOL No Clue
Hey BadBoy, wasn’t it you who posted back in May:
BRKB not trading at $278/B share again. No way
You’ve made prior comments along those lines that made me think you were, well, clueless, about what kind of price action was entirely possible.
Now as we’ve just entered bear market territory in the S&P 500, and BRK has predictably traded down with it, the price hit your ‘no way’ level and below yesterday, with no sign of a bottom.
Chompin has decades of experience in the market and he’s right that this is not time to hyperventilate. Predicting the future is hard (understatement), but there’s no sign of the market bottoming at the moment, IMO.
Buying BRK at this level is a good buy, but for those who have cautiously been waiting for the market to drop with excess cash, it’s not necessarily time to move all-in.
Personally I’m fully invested and just plan to ride it out. I’ll probably try to rustle up some more money to invest soon.
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I was dead wrong
Pull-up chart of BRKB
Tells you it is systemic
Pull-up chart of BRKB. Tells you it is systemic
What about the chart of BRKB do you want us to note?
Obviously the US economy has systemic problems at the moment, though I wouldn’t look at the BRK chart for evidence. The chances of the Fed engineering a soft landing in this environment are looking like they’re slim to none, with Ukraine and China causing so many supply side problems and soaring energy prices. So the market is in the process of pricing in a recession within the next year or so.
The business cycle continues. It’s not the end of the world, but the market can certainly continue down for a long time to come in this kind of environment with the S&P 500 starting off from a very high valuation. BRK is likely to trade down with it, at least for a while, though BRK was never anywhere near so richly valued as the S&P 500 in recent months, so value investors may well slow and stop its decline before the S&P 500 hits bottom. Or not. In a panic, BRK will get sold along with everything else.
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Berkshire at $276 the greatest entry price ever? No, not even close. My best guess is that we’ll have years and years of being able to buy stocks at reasonable prices to get reasonable returns
S&P down 21% from highs and VIX is only at 34, is hardly the great melt-down and once in a generation buying opportunity. Even mungo’s MI bottom indicators haven’t kicked in.
For a newbie, nibbling at these prices to take a starter position is fine. But I suspect there will be several more opportunities to buy lower.
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Well BRK hit my target of c280 1.2x historic book. That’s good enough for me and was my buy target so I’m buying again. Second buy this week. My first ever entry point was 1.1x book in 2012 and that turned out nicely over the decade folowing, close enough for me. Long term view of course…
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“But I suspect there will be several more opportunities to buy lower.”
May this afternoon noon, if the Fed surprises.
“But I suspect there will be several more opportunities to buy lower.”
May this afternoon noon, if the Fed surprises.
Maybe too late?
No surprise, though.
"U.S. stocks soared Wednesday after the Fed’s announcement." 0.75% increase.
BRK.B dropped under 275, for about 1 minute.
Got my fill.
Is it still allowed to talk about BRK on this board?
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chompin wrote:
Remember the world didn’t begin in 2017 as the superstar Saul of Saul’s board suggests.
If you are going to argue against a strawman, and numerous people are going to read you as if you, could you please make the vaguest attempt to not lead your fans into stupidity?
Saul has published results of his portfolio performance going back to at least 1993. Here is just a section.
If your memory, or commitment to accuracy only goes back to 2017, please don’t attribute that to other humans who have put in the effort to be transparent, it is not really fair to them or to your readers!
Here is Saul’s annual results since 1993, which he has reported on his board over the years:
1993 21% 21%
1994 15% 40%
1995 43% 101%
1996 29% 160%
1997 17% 205%
1998 5% 220%
1999 116% 590%
2000 19% 724%
2001 47% 1110%
2002 20% 1349%
2003 125% 3152%
2004 17% 3695%
2005 16% 4287%
2006 9% 4664%
2007 23% 5736%
2008 -63% 2089%
2009 111% 4511%
2010 0% 4525%
2011 -15% 3855%
2012 23% 4764%
2013 51% 7245%
2014 -10% 6525%
2015 16% 7585%
2016 3% 7777%
2017 84% 14410%
2018 71% 24769%
2019 28% 31832%
2020 233% 106234%
2021 71% 182051%
1st column: the year
2nd column: gain for that year
3rd column: cumulative return for money invested and left there since 1993</pre
2017 indeed!
Sheesh,
R:
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Ralph, you post is a convenient avoidance of the screaminly obvious fact that Saul’s claims sucked in literally hundreds at precisly the times he should have said “get the hell out now.” Dude, if I posted my results since 1975 I could shock the living hell out of you. But to do so is literally not relevant to the period of Saul’s supposed heroics.
So when the SAAS stocks were about double today’s price almost 60% on that board had lost money. What do you think that percentage is today?
Bet 95% of those on the Berk board have made money using the posters who tend to own the narrative here.
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Here is Saul’s annual results since 1993, which he has reported on his board over the years:
1993 21% 21%
1994 15% 40%
1995 43% 101%
1996 29% 160%
1997 17% 205%
1998 5% 220%
1999 116% 590%
2000 19% 724%
2001 47% 1110%
2002 20% 1349%
2003 125% 3152%
2004 17% 3695%
2005 16% 4287%
2006 9% 4664%
2007 23% 5736%
2008 -63% 2089%
2009 111% 4511%
2010 0% 4525%
2011 -15% 3855%
2012 23% 4764%
2013 51% 7245%
2014 -10% 6525%
2015 16% 7585%
2016 3% 7777%
2017 84% 14410%
2018 71% 24769%
2019 28% 31832%
2020 233% 106234%
2021 71% 182051%
So if I’m reading this correctly, the master turned $10,000 into $18 million? Even after the recent 60% haircut he’s had it would be $7.3 million. That’s a 16% CAGR. Not bad at all, but I’m pretty sure you can get that alpha without all that beta through value investing. Our IRR between 1998-2022 is 16% as well, without all that beta.
I credit a previous generation of Berkshire board posters for pointing me towards value investing in 1998 as the primary reason for our success. Like most fools at the time I was enamored with the tech high flyers. After reading Security Analysis and digesting the basic math these posters used to evaluate the tech valuations back in 1998, we sold out and switched to Berkshire.
I’ve made plenty of mistakes over the years, pretty much getting wiped out of value traps Sea Containers and CBI, as well as selling AZO and half our MSFT position too soon. The biggest mistake I’ve made is selling some Berkshire to diworsify. That’s never worked out. If I’d followed chompin’s habit of holding everything forever, even losers like sea and cbi, I’d be a lot better off.
Overall, though, buying shares of good companies at cyclically low prices relative to intrinsic value has worked out very well over the long haul. We’re holding AAPL @$14.30, BAM @$13, BRKB @$51, MSFT @$25, and JNJ @$60. I missed out on a ton of upside by riding AZO from $87 to $140 and then selling because I thought it to be fairly valued. It’s at $1990. If I held it would be returning 21% annually. Lesson learned? Buy good companies at great prices and hold forever.
Recent purchases include more Berkshire, GOOG and META, FDX, PARA and WBD, BABA and BIDU, KMX (thanks Jim), and TROW. All are 1-2% positions. The biggest share of our portfolio is and will always be Berkshire.
I tried to share this valuation criticism of SaaS stocks on the Saul board last fall. I was censored and banned. It’s a crime that Saul refugees are now washing up on our shores as a little criticism might have helped a few learn to swim before the storm foundered the HMS Growth at Any Price.
There is no shortcut to wealth except inheritance. Value investing is the next best option.
PP
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PP, have you considered JPM?
I bought a tiny amount last week (0.3% of my portfolio). I sold it at 104 in 2020 and I regretted it.
Philip, how did you arrive at the 16% CAGR (including 2022)?
Here are my calculations:
Yr-end Return Port Value CAGR
Start 0% 100% 0.00%
1993 21% 121% 21.00%
1994 15% 139% 17.96%
1995 43% 199% 25.78%
1996 29% 257% 26.58%
1997 17% 300% 24.60%
1998 5% 315% 21.10%
1999 116% 681% 31.53%
2000 19% 811% 29.90%
2001 47% 1192% 31.69%
2002 20% 1430% 30.48%
2003 125% 3217% 37.10%
2004 17% 3764% 35.30%
2005 16% 4366% 33.71%
2006 9% 4759% 31.77%
2007 23% 5854% 31.17%
2008 -63% 2166% 21.19%
2009 111% 4570% 25.21%
2010 0% 4570% 23.66%
2011 -15% 3885% 21.24%
2012 23% 4778% 21.33%
2013 51% 7215% 22.60%
2014 -10% 6493% 20.89%
2015 16% 7532% 20.67%
2016 3% 7758% 19.88%
2017 84% 14275% 21.95%
2018 71% 24411% 23.55%
2019 28% 31246% 23.71%
2020 233% 104048% 28.16%
2021 71% 177922% 29.44%
2022 -60% 71169% 24.47%
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The figures as reported in the table represent 30.75% over 28.0 years.
I’m not sure if I understood one of the comments about recent losses, but if he has had a 60% drop in the portfolio year to date, the update would be CAGR 26.05% over 28.47 years.
That’s extremely impressive. Good on him.
One note:
I have no particular reason to doubt his reported returns.
But the mere fact that they were reported along the way doesn’t make them necessarily any more legit than ones posted at the end of the period.
Having posted a lot of picks that did well does bolster the notion, but diehard cynics and skeptics can keep to their philosophies if they like.
Jim
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3rd column: cumulative return for money invested and left there since 1993
“for money invested” is a big unknown. For example, if in some years only 10% of money is invested, that’s hardly impressive.