Black Monday

[percy]

Bit of humour,

https://stockhead.cmail19.com/t/d-l-zoouy-yupddjlly-x/

[SailorRob]

So our opinions only matter once we are in the Fortune 400?

Do you have an opinion or are you a believer in the efficient market hypothesis. Drip feeding into index funds? Time in the market etc etc?

I agree no one knows when the market bottom is in not even the people in the fortune 400.

What is wrong with having a guess this is the "Share Trader" site not the "Long Term Investor" site.

Absolutely not, your opinions on what the market does in the short or medium don't matter whether in the Fortune 400 or not. Unless you get there from market timing. You'd be the first person in the world and then your opinion would not only matter it would move markets.

I have no opinion whatsoever on what 'the market' will do over any time period. Could easily be lower than today in 15 years. The bottom could be in or could be 30% lower. Nobody knows. Hopefully nobody cares as we are not investing in 'the market'.

That does not mean I am a believer in efficient market hypothesis, only a total moron would believe such nonsense. Believing that you can't time the market or pick a bottom and believing in efficient markets - they are two very different things.

I have strong opinions about individual businesses and their future prospects compared to what's implied by their current prices - which are often set by those folk who have opinions on the bottom being in or not or trading off 12 screens. Without these people I'd be screwed as the market would be more efficient.

I also occasionally have strong opinions about entire sectors and combined with opinions on individual companies I sometimes swing for the fences. This is why I put a significant portion of my net worth into Occidental Petroleum warrants just under $3 and another significant portion into select other Oil/Gas companies when the WTI contract went negative. All was recorded at the time here on Sharetrader. What I will not claim though is that I saw the current situation developing. I merely thought I'd do well over the next 3 to 5 years. I also held firm while my hero Mr. Buffett sold everything.

I have never purchased an index fund and hopefully never will. I run a pretty concentrated portfolio with 50% of my entire net worth invested in 3 companies, and 100% invested in common stocks.

Time in the market. Absolutely. The rest of my life.

What's wrong with a guess, a speculation? Nothing. As long as it is specified as such. And as long as you know you will never have long term success acting on those guesses. Too many people here actually believe that they have a edge predicting these things and my point is to highlight to other interested parties that this is rubbish and not the way to behave. As once upon a time I would also have believed them.

You raise a good point regarding the name of the site.

[Bobdn]

Wow, SailorRob, 50 per cent of networth in three stocks is courageous. One of those is Berkshire if I recall correctly? So at least that's a highly diversified company.

Been there and done that but took it to extremes. It was the best of times and the worst of times. Stupidly I had 40 per cent of networth in Chorus and I lost a ton (on paper), and then I made a ton (when the Commerce Commission reversed it's decision) and then I headed for the hills and never put myself in that situation again.

I love index funds/ETFs. Very few actual index funds in NZ. USF.nzx is up 75 per cent in the last 5 years ie the number of years I've been retired. Good enough for me, and keeps the G&Ts flowing, at least at this stage. There must be another lost decade sooner or later, it won't always be as good as this.

[alokdhir]

https://www.marketwatch.com/story/th...=mw_latestnews

Proposals like these show Bosses getting very worried about Bond market stability ....big moves up and down is showing market is scared and doesn't have a clue ...very easy to lead to panic thus collapse .

Bond market is back bone of government finances world over ...they just cant afford it to crash or go full on panic ...how will they finance helicopter rides etc

[alokdhir]

Bulls trying desperately to hold on to S&P500's 3600 handle ....seems like its ready to go and then big leg down as more sellers then buyers ...

Bull's 3300 beckons ....

https://www.marketwatch.com/story/heres-how-rare-s-p-500s-violent-reversal-was-after-thursdays-inflation-report-and-what-history-shows-may-come-next-according-to-bespoke-11665763623?mod=home-page

[winner69]

Bulls trying desperately to hold on to S&P500's 3600 handle ....seems like its ready to go and then big leg down as more sellers then buyers ...

Bull's 3300 beckons ....

https://www.marketwatch.com/story/heres-how-rare-s-p-500s-violent-reversal-was-after-thursdays-inflation-report-and-what-history-shows-may-come-next-according-to-bespoke-11665763623?mod=home-page

Is 3300 a pause stage on way to 2800?

[SailorRob]

Wow, SailorRob, 50 per cent of networth in three stocks is courageous. One of those is Berkshire if I recall correctly? So at least that's a highly diversified company.

Been there and done that but took it to extremes. It was the best of times and the worst of times. Stupidly I had 40 per cent of networth in Chorus and I lost a ton (on paper), and then I made a ton (when the Commerce Commission reversed it's decision) and then I headed for the hills and never put myself in that situation again.

I love index funds/ETFs. Very few actual index funds in NZ. USF.nzx is up 75 per cent in the last 5 years ie the number of years I've been retired. Good enough for me, and keeps the G&Ts flowing, at least at this stage. There must be another lost decade sooner or later, it won't always be as good as this.

Yes that's correct, Berkshire is well over 20%. The other is Markel which is a Berkshire styled company. Interestingly Berkshire is about 12% of Markel's stock portfolio and Berkshire just bought Markel in their portfolio earlier this year.

Honestly for me, I would need to find courage to not own these companies (2 of them) in these proportions! No courage required. As you have alluded to, in fact two of these three stocks actually represent hundreds of individual companies.

What has required courage is holding the other one, Occidental Petroleum, which despite my often selling down it has grown to be such a large position. Once Buffett started buying it up BIG (owns over 20% of the company) I decided that I would not sell another share.

So interesting the internal linkages between my top 3 holdings, Berkshire owns Markel and Occidental and Markel owns Berkshire and Occidental borrowed money from Berkshire to buy Anadarko.

It can always be as good as this, but yes if you own broad ETF's then there may well be a lost decade. I urge you to look at Berkshire as an alternative to the ETF's.

[alokdhir]

Is 3300 a pause stage on way to 2800?

My apologies I forgot to mention your desired level ...surely 2800 also possible why not ? Markets do please all at some point or another ...why just Bull ...it will please W69 too ...also next year when HGH is 2.40 then also it will be pleasing many ...different strokes for different times

[Gerald]

It can always be as good as this, but yes if you own broad ETF's then there may well be a lost decade. I urge you to look at Berkshire as an alternative to the ETF's.

Seems somewhat counterproductive? Buffett himself has said at a large size brk's returns won't be able to beat the index much or at all over time. He will be off in a few years and those left running the show don't seem to have proven the ability to generate excess returns even with small pools of money (https://www.cnbc.com/2019/02/25/warr...he-sp-500.html).

[SailorRob]

Seems somewhat counterproductive? Buffett himself has said at a large size brk's returns won't be able to beat the index much or at all over time. He will be off in a few years and those left running the show don't seem to have proven the ability to generate excess returns even with small pools of money (https://www.cnbc.com/2019/02/25/warr...he-sp-500.html).

No, a few major things you're missing.

Buffett has always under promised and overdelivered. Berkshire is not a just a common stock portfolio. Berkshire has totally destroyed the SP500 over any time period but what many see is the stock price which is a totally different thing. The underlying business has massively outperformed even over the last decade. But in terms of the voting machine, the SP500 has had more votes at times and is now drastically more expensive despite underperformance.

See this short write up for more information and the outperformance has continued since. https://www.vltavafund.com/analyzy/brkindex

I have much more extensive analysis that I have done which I can send anyone interested

Remember Berkshire has destroyed the indexes while holding a huge portion of equity capital in cash as well.

Your article is from 2019 and yes there will be long periods where Ted Todd and Buffett equity portfolios underperform the market but what you're missing is that Ted Weschler turned $70,000 into 240 million in under 30 years with no added capital. This is a CAGR of 32% for 30 years. The other fellow is as good as well.

Do you consider that to be proven ability to generate excess returns with small pools of money??

It's extremely difficult for me to imagine a scenario where Berkshire doesn't compound at 10 to 14% CAGR over the next decade and the SP500 might do low single digits if you're extremely lucky. They have both stretched out like a rubber band in opposite directions.

Investing decisions mean doing more work than reading one article from 2019. I've spent well over a thousand hours on Berkshire alone.