gfp927z
20 hours ago
Bar, >> neither has ever suffered thru a bear market <<
We've had numerous bear markets (below), though the one in 2020 was very brief. The 2022 bear wasn't pleasant, but was predictable due to the Fed tightening. Also, during the 12 year period from 2000 - 2012 the S+P 500 essentially went nowhere, due to the Dot Com crash and then the 2008 crash. So not a great time to be LT buy / hold, but if you stuck with it everything finally recovered.
A logical approach for the very long term would be to hold the broad stock index and then don't follow it. Don't have stocks as a main hobby, and hardly follow them at all, check your brokerage account value maybe once or twice a year. That's what my dad did (he was an aero engineer like your son). He just wasn't interested in stocks, and his investments did great. But when stocks become a key hobby / interest, that's when the trouble starts, lol.
S&P 500 Bear Markets
August 1956
-21.6%
December 1961
-28%
February 1966
-22.2%
November 1968
-36.1%
January 1973
-48.2%
November 1980
-27.1%
August 1987
-33.5%
July 1990
-19.9%
March 2000
-49.1%
October 2007
-56.8%
February 2020
-33.9%
January 2022
-25%
https://www.investopedia.com/a-history-of-bear-markets-4582652
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gfp927z
2 days ago
Bar, >> sell them the moment a cloud appears <<
Yes, I have trouble holding after the profits have built up, and am compelled to grab the gains before they evaporate. With the choppy market, this has actually worked well in recent years, but is obviously not the ideal. What makes this active approach workable is that I still have some carry forward losses from the 'bad old days', so there are no cap gains taxes on the stock sales. But once those losses are gone it will be a different ballgame. I should have used your LT buy / hold approach from the beginning, but unfortunately in the early years got side tracked by the lure of fast riches.
That said, while holding on to an individual large cap stock forever may be the ideal, even Buffett can change ships relatively often when he thinks his analysis was wrong, or when situations change, etc. And even the S+P 500 has approx 30% in the Mag 7 bubble stocks, so finding a relatively 'safe' place in the stock market isn't easy. Even utilities have become hot potatoes in recent years, with the nuclear and AI power aspects bringing a casino like atmosphere to the sector.
Buffet and Peter Lynch both said that if the prospects of a 20% or 30% plunge would keep you up at night, you shouldn't be in stocks. Fwiw, my own max stock allocation is down to 15%, and I still worry, and have moved a lot into a 3 year Treasury ladder. Buffett himself reportedly has more in cash / T-bills than in stocks right now, so I assume he is also worried, but in a specific way, about valuations, etc. In contrast I'm just a nervous nellie in general, lol.
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bar1080
2 days ago
About 50 years ago, when I was very young and in college, I was uniquely positioned to buy CAT shares. An economics professor I had was also on Caterpillar's board (or some kind of major consultant for them) and thought well of the company. Anyway I decided instead, for some reason, to buy shares in Allis Chalmers, not CAT.
Lesson learned: Own the #1 company in a sector, not the #3 or #4. Allis Chalmers shut down in 1999. I had sold it long before that with a moderate loss. .
BullNBear52
2 days ago
Art Cashin was truly a genius when it came to understanding the market. By the age of 23 he had become a member of the NYSE. A class act that will be sorely missed.
https://www.cnbc.com/2024/12/02/art-cashin-new-york-stock-exchange-fixture-for-decades-dies-at-age-83.html
Art Cashin, New York Stock Exchange fixture for decades, dies at age 83
Published Mon, Dec 2 20243:40 PM ESTUpdated Mon, Dec 2 20245:11 PM EST
Key Points
Art Cashin was UBS’ director of floor operations at the New York Stock Exchange and a man The Washington Post called “Wall Street’s version of Walter Cronkite.”
In the intensely competitive and often vicious world of stock market commentary, Cashin was that rarest of creatures: a man respected by all, bulls and bears, liberals and conservatives alike.
gfp927z
2 days ago
Bar, Yes, Deere is a high quality company. It does have a substantial amount of debt though, ~ 66 bil, so approx half of its market cap. The stock has been basically flat for the last 3-4 years, but recently broke out so could be ready to resume its long tem uptrend. Caterpillar is another nice one in the heavy machinery area. They have considerably less debt (38 bil), which is only 20% of the market cap. That's the one I owned, but with Deere's breakout it could be ready to play catch up. Reportedly there was a big surge in agro equipment sales back in 2022, but a relative dearth since then. But DE might be a good contrarian value play. I noticed that Buffett doesn't seem to mind companies with higher debt levels, so Deere might potentially become a new Berkshire holding again at some point (?)
>>> Deere Shares Surge on Optimism Farm Gloom Will Lift in 2025
gfp927z
5 days ago
Bar, As I understand it, OXY is especially sensitive to the oil price, compared to other companies. I don't follow the sector too closely, but lots of countervailing factors go into the oil / gas price at any given time. Right now there's the economic slowdown in China, war related disruptions, OPEC members cheating, oil / gas coming back into favor with Trump, which increases demand, while 'drill baby drill' boosts supply, etc.
But another key aspect with OXY is it's leadership in 'carbon capture', which could eventually generate more revenue for OXY than it's oil / gas business. But with Trump / Reps in, carbon capture and climate change in general should be a much lower priority, at least for a period of years. We'll see what happens. Imo, 'carbon capture' is the most ridiculous concept ever, and anthropogenic climate change is being pushed for reasons unrelated to climate. But business is business, and if carbon capture and carbon credits are the future, Buffett's big OXY bet should pay off.
But either way, OXY will benefit from oil / gas retaining a more dominant role in energy, thanks to Trump. There's also another aspect to carbon capture related technology, since injecting CO2 into older gas reserves can boost their output (link below). So a plus to have OXY as the leader in this technology -
>>> CO2 enhanced gas recovery and sequestration in depleted gas reservoirs: A review
gfp927z
5 days ago
Bar, Looking at the Japanese conglomerates, they've had pullbacks from their highs earlier in the year of between 15-35% (approx). The broader Japan ETF (EWJ) is only down ~4%, but over the past five years most of the 'Buffett 5' have blown away the broader Japan index by a wide margin. Not sure if Buffett has been buying more at these levels, but growing concerns over China may have him reluctant to add more exposure to Asia right now (?)
As we know, Buffett has been hoarding cash in a major way, with 8 consecutive quarters of net stock selling. The Chubb move has been doing great, OXY not so well but it's still early. But overall Buffett's been net selling and not reinvesting much back into stocks, or even purchasing Berkshire stock. I also wonder why Ajit Jain has sold over half his stake in Berkshire? Seems ominous to me, but then I tend to worry about everything lol.
---
bar1080
2 weeks ago
Berkshire Fine Spinning Associates is Formed
Berkshire Fine Spinning Associates Inc. incorporated under Massachusetts laws in 1929 as a consolidation of Berkshire Cotton Manufacturing Co., Valley Falls Co., Coventry Co., the Greylock Mills, and Fort Dummer Mills. The company changed its name to Berkshire Hathaway in 1955 when it acquired Hathaway Manufacturing Co. Berkshire Fine Spinning Associates Inc. manufactured fine grades of cotton textiles and specialized in fine lawns, batistes, nainsooks, organdies, dimities, handkerchief cloths, broadcloths, oxfords, sateens, rayon and silk mixtures. Plants were located in New Bedford, Massachusetts. Berkshire offered 33,000 shares of common stock in 1929 at $40 per share as well as 4,860 shares of 7% Preferred stock, also at $40 per share. Unfortunately, the shares were offered in the middle of the 1929 bull market, and the share price collapsed soon after. In November 1929, the ask price for Berkshire stock was still at $40, but in November of 1931, shares sank to $0.50. Sales for the company declined and Berkshire ran losses until 1936.
As late as 1940, shares traded as low as $3, but profits and the share price picked up with the war. Berkshire did well enough that it was able to reinitiate a regular dividend in 1942 (the dividend had been suspended in March 1930), and in September 1947, the company had a 3-for-1 split. Of course, the split marked the high mark for Berkshire and the stock began a downward trend that lasted until 1962. The graph below shows the performance of Berkshire Hathaway Inc. stock from 1929 until 1967 when Warren Buffett took over the company. As you can see, there was little change in the stock price in the forty years before then. Berkshire lost money between 1930 and 1936, and it lost money in 1957, 1958 and 1961 to 1963. Despite the fact that sales had tripled between the 1930s and the 1960s, there was no comparable increase in profits. In 1963, Berkshire stock was still trading below the price it had been offered at in 1929!
Buffet Buys Berkshire
Buffett began buying shares in Berkshire Hathaway at less than $8 in 1962 and by 1966, Buffett and his partners had taken over the company.As soon as Buffett took over Berkshire, he began focusing on insurance and other businesses rather than textiles. Buffett had invested in American Express when Anthony de Angelis’s fraud caused the price of American Express to drop dramatically in 1964. In the 1970s, Buffett expanded his investments to include media companies (The Washington Post and ABC) as well as other companies that fit his investment criteria. The final Berkshire mill was closed down in 1985.
Berkshire Hathaway paid a regular dividend between 1942 and 1960 when the dividend was suspended due to losses. Buffett paid a $0.10 dividend in November 1967, but that was the only dividend the company ever paid under Buffett. Thenceforward, profits were reinvested in the company to allow the share price to grow. Buffett lived off of his $50,000 salary and outside investment income. Berkshire Hathaway stock continued to trade OTC until October 1976 when it listed on NASDAQ. The shares moved to the New York Stock Exchange in November 1988 and in May 1996, Berkshire issued lower-priced Class B shares to investors who could no longer afford to buy a share of Berkshire Hathaway, Class A shares, which by that time had risen in price to $35,000.
Berkshire Booms
The impact of Buffett on Berkshire was incredible. Shares in Berkshire which had gone nowhere for 40 years began increasing at a rapid pace. The stock closed at $18.625 in 1966. Shares first broke the $100 mark in 1977, the $1000 mark in 1983, the $10,000 mark in 1992 and the $100,000 mark 2006. Shares now trade around $200,000. Buffett could have bought any company and the results would have been the same. As soon as Buffett took over Berkshire Hathaway, he began to focus on other businesses and ignore the company’s core manufacturing business. In fact, at one point, Buffett said that buying the textile business had been the worst trade of his life. I guess everyone is allowed one mistake.
https://globalfinancialdata.com/berkshire-before-buffett
Bountiful_Harvest
3 weeks ago
Mr. Buffett adds Domino's Pizza to the portfolio. 🤔
https://www.benzinga.com/markets/equities/24/11/41993666/warren-buffetts-berkshire-hathaway-slashes-apple-bofa-holdings-adds-dominos-pizza-in-q3
Meanwhile, Buffett added a couple of fresh faces to Berkshire’s portfolio.
Buffett bought 1,277,256 shares of Ann Arbor, Michigan-based pizza chain Domino’s Pizza Inc
He also made a foray into pool equipment, buying 404,057 shares of Pool Corp
🍕?
DiscoverGold
3 weeks ago
Here are all the moves Warren Buffett and Berkshire Hathaway $BRK.B made last quarter:
By: TrendSpider | November 14, 2024
• Here are all the moves Warren Buffett and Berkshire Hathaway $BRK.B made last quarter:
Bought $HEI.A, $DPZ, $POOL
Sold $COF, $NU, $SIRI, $BAC, $AAPL, $CHTR, $ULTA, $LSXMK, $LSXMA, $FND
Read Full Story »»»
DiscoverGold
gfp927z
3 weeks ago
>>> Warren Buffett is building the Noah's Ark of rainy-day funds. Here's why he's stacked up more than $300 billion.
Business Insider
by Theron Mohamed
November 13, 2024
https://finance.yahoo.com/news/warren-buffett-building-noahs-ark-195506592.html
Warren Buffett has grown Berkshire Hathaway's cash pile to more than $300 billion — a record high.
The famed investor has halted stock buybacks and pared key holdings such as Apple and Bank of America.
Buffett, 94, is facing a bargain drought and may be preparing to hand over control of Berkshire.
Warren Buffett has been selling shares and stacking up cash at a terrific rate, fanning speculation as to why the world's foremost stock picker is pulling his money out of the market.
Berkshire Hathaway roughly tripled its pile of cash, Treasury bills, and other liquid assets to a record $325 billion over the two years to September 30 (or $310 billion after subtracting almost $15 billion of payables for Treasury bill purchases).
The conglomerate's cash hoard now exceeds Berkshire's total market value just over a decade ago. It accounted for at least 27% of Berkshire's $1.15 trillion of assets at quarter end — the largest proportion in many years.
One big reason for the ballooning cash pile has been a lack of compelling things to buy. Buffett is a value investor who specializes in sniffing out bargains, and those have become rare finds in recent years.
"I have heard every speculative idea imaginable, from accumulating capital for a doomsday scenario to planning to make a gigantic cash dividend," Lawrence Cunningham, the director of the University of Delaware's Weinberg Center on Corporate Governance and the author of several books about Buffett and Berkshire, told Business Insider about the rationale for Berkshire's cash pile.
"Both seem far-fetched," he said. "The most likely cause of cash buildup at Berkshire is absence of attractive capital deployment opportunities."
Cunningham said stocks have surged to record highs, private-business valuations have jumped, Berkshire-owned businesses like Geico and See's Candies can only deploy so much money, and Berkshire's Class A shares have climbed to record levels of about $700,000.
Hot stocks
The US stock market's total value hit a record high of $58.13 trillion on Monday, an unprecedented 198.1% of US GDP last quarter, Wilshire Indexes data shows.
That metric is known as the "Buffett Indicator" because the investor once hailed it as an excellent yardstick for valuations. Buffett said it should have been a "very strong warning signal" when the measure spiked during the dot-com bubble, and buying stocks when it nears 200% is "playing with fire."
The Wilshire 5000's elevated level makes "this stock market the most overvalued in history — even higher than at the peak of the tech bubble in 2001-2002," Paul Dietrich, chief investment strategist at B. Riley Wealth Management, told BI.
It may be little surprise, then, that Buffett didn't buy back a single Berkshire share last quarter after spending $20 billion on repurchases between the start of 2022 and June 30 this year — likely because he and his team no longer see their company's stock as good value.
His team has also been paring Berkshire's stock portfolio. They sold $133 billion of stock — a sum that exceeds Citigroup's market cap — in the first nine months of this year, and bought less than $6 billion worth over the same period.
They cut Apple, their most valuable holding, by 60% in that timeframe. They also trimmed Bank of America, their number-two holding, by 23% between mid-July and early October.
Less buying and more selling fueled a $140 billion-plus increase in Berkshire's cash hoard in the nine months to September 30.
Frustration and preparation
There are other possible explanations for Berkshire's towering cash pile. Buffett suggested in May that a potential increase in capital gains tax factored into his decision to realize some of his massive gain on Apple — although Donald Trump's reelection is expected to stave off a near-term increase.
The "Oracle of Omaha" is earning much more on Treasury bills now than three years ago when interest rates were close to zero. On September 30 Berkshire owned $288 billion worth — more than the Federal Reserve.
The 94-year-old billionaire may be crystallizing some of his gains on winning bets like Apple to safeguard his legacy. He might also be cleaning up his portfolio and setting aside cash in anticipation of Greg Abel, the boss of Berkshire's non-insurance operations, succeeding him as CEO.
David Kass, a finance professor at the University of Maryland who's been following Buffett for nearly 40 years, suggested the investor may be "preparing for the transition to Greg Abel and enabling him to decide how to invest those funds, along with Ted Weschler and Todd Combs," referring to Buffett's two investment managers.
Buffett might also be socking away money because he sees trouble ahead.
"He has a history of selling out of the stock market when the leading economic indicators, inverted treasury yields, and his famous Buffett Indicator are signaling a bear market or a recession is coming," Dietrich said.
Buffett could tap his cash pile to rebuy Apple and other stocks he's sold at a significant discount "after the current nose-bleed stock market highs eventually come back down to earth," Dietrich added.
Whether Buffett is purposely building the Noah's Ark of rainy-day funds because he expects a crash or economic collapse, or has simply been priced out of markets, he's poised to have plenty of firepower to once again scoop up cut-price stocks and businesses if a downturn does materialize.
gfp927z
3 weeks ago
>>> Buffett’s Berkshire Is Being Packaged Into a Leveraged ETF
Bloomberg
by Miles Weiss and Youkyung Lee
November 12, 2024
https://finance.yahoo.com/news/buffett-berkshire-being-packaged-leveraged-193611168.html
(Bloomberg) -- Warren Buffett created Berkshire Hathaway Inc.’s Class B shares almost 30 years ago to stymie money managers who sought to split the high-priced conglomerate’s stock.
One of South Korea’s largest retail brokerages now plans to package the Class B shares into an exchange-traded fund turbocharged with derivatives, another move that Buffett might not like.
Kiwoom Securities Co. teamed up with Milwaukee-based Tidal Investments to form an ETF designed to provide 200% the daily performance of Berkshire, according to a regulatory filing.
Single-stock ETFs such as this have been sweeping the fund world, using leverage that amps up the potential returns — and losses — of high-flyers such as Nvidia Corp. and Tesla Inc. In South Korea, brokerages such as Toss Securities and Mirae Asset Securities Co. have been seeking to capitalize on rising demand for US stocks amid sluggish performance by domestic equities.
“Traditionally on the leveraged ETFs, the lion’s share of the interest and asset flow has been on the more volatile names,” Gavin Filmore, chief revenue officer for Tidal, said in an interview. “Berkshire is almost the polar opposite.”
Leveraged ETFs are often meant for active traders who want to bet on a stock’s performance for no more than a single day, as these funds typically veer off course when tracking shares over a longer period. The use of derivatives to juice Berkshire returns might not sit well with Buffett, who once called them “financial weapons of mass destruction.”
While Buffett’s firm is a well-known name, it remains to be seen whether day traders will have an appetite to ride a steady stock such as this one with this type of leveraged strategy. Buffett is known as the ultimate long-term investor who advises people to own stocks they’d be comfortable holding for years.
Buffett, 94, and his firm already have a following in South Korea. As of Nov. 8, individual investors in South Korea owned more than $800 million worth of Berkshire Class A and Class B shares, according to data compiled by the Korea Securities Depository.
Asian markets “have a penchant for Berkshire,” said Matthew Palazola, an insurance analyst at Bloomberg Intelligence.
A Kiwoom representative declined to comment. Representatives for Berkshire didn’t reply to a message seeking comment.
Retail investors in South Korea have embraced some of the largest leveraged ETFs listed in the US. The Direxion Daily TSLA Bull 2X Shares, a single-stock ETF for Tesla stock, has taken in $225 million so far this year from South Korean retail investors, raising their total stake in the ETF to $1.2 billion as of Nov. 8, according to depository data.
While Kick BRK 2X Long Daily Target, as it’s known, would be the first Berkshire single-stock ETF in the US, several others trade abroad. Still, they’ve failed to gain much of a following: Leverage Shares 2x Long Berkshire Hathaway ETP Securities, which trades on several European exchanges, only has about $2.3 million of assets.
Kiwoom’s new ETF would buy Berkshire Class B shares and then issue its own stock to investors, potentially at a much lower price than the $467.36 that each Class B share sold for as of market close on Monday. To amplify its exposure to Berkshire’s daily returns, the ETF will enter into swaps with broker dealers and also trade listed options on the Omaha, Nebraska company’s B shares.
The Berkshire ETF would be a Kiwoom product that Tidal runs behind the scenes in exchange for a portion of management fees.
‘Stained Reputation’
Wall Street’s efforts to create an early version of a single-stock fund for Berkshire shares spurred Buffett to create the company’s Class B shares almost three decades ago. At the time, Berkshire had only one class of stock that traded for more than $30,000 a share, and ETFs were in their infancy.
In 1995, Philadelphia politician Sam Katz filed papers to create a unit investment trust, a fund-like vehicle that buys a fixed portfolio of stocks and bonds up front and then holds the securities for a set period. He wrote that the trust would provide “convenient and affordable access to the common stock of Berkshire Hathaway without the requirement to own full shares.”
Berkshire threatened to put the trust out of business by doing a stock split, setting up its own trust or creating a second share class, Katz said in an interview.
Buffett made good on that last threat by issuing Class B shares equal to 1/30th of a Class A share. Investors flocked to the new stock, rendering trusts such as Katz’s obsolete.
In a 1996 letter to shareholders, Buffett warned that such trusts were “expense laden” vehicles that brokers would market “en masse to unsophisticated buyers” in order to earn big commissions. That would have burdened Berkshire “with both hundreds of thousands of unhappy, indirect owners (trustholders, that is) and a stained reputation.”
Katz said he doesn’t have any regrets: “How many guys do you know who get to do battle with Warren Buffett?”
Bountiful_Harvest
4 weeks ago
At this stage, I think Mr. Buffet sees an overvalued market. I'm not sure if he has future plans for Apple. It seems Apple is no longer the innovator they once were. Their latest iPhone was a flop. Who knows though...perhaps BRK would like to make Apple it's own and re-engage disruptive innovation. IMO, best time to buy them out would be after a stock market correction/crash...Buffet waiting for good deals??
Like Buffet, I too like railroad stocks. My grandfather worked the railroads during the Great Depression. Railroads are here to stay no matter what the economy does. RRs are capital intensive, but as disruptive technology and innovation evolves, railroad costs should decline. RR "dividends" to increase substantially in the future?
https://www.up.com/aboutup/community/inside_track/ztr-hybrid-locomotives-it-240429.htm
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=167728251
I think Buffet foresees big problems with the big banks, hence his liquidation of $BAC shares this year:
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=175340681
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