"Friday 4th August Berkshire Hathaway (BRK-A) reported its biggest quarterly earnings haul ever up 41% to $6.4 billion".
"Buffett's stock holdings are surprisingly focused: Berkshire's top four holdings account for 58% of his equity investments. If you include his $10.5b worth of Bank America (BAC) options that brings his top five holdings to over 60% of his book".
Buffett's total equity basket has a market value of $119 billion. The largest positions as of June 30th were Wells Fargo (WFC) at $25.4b Coca-Cola (KO) at $16.9b, American Express (AXP) at $14.4b and IBM (IBM) with $12.7b. The company also has the option of buying 700 million shares worth of Bank of America for $5b until 2021. On a current market value basis that makes the equity portion of the stake worth $10.5 billion (which actually dramatically understates the real value of the position).
Add it up and Berkshire's five biggest equity-like positions are three financial companies, an ancient position in Coca-Cola and IBM. Berkshire accumulated IBM over two years from Q1 2011 to Q1 2013 for an average of $171 per share. It's Buffett¹s only tech stock and one of his biggest losers on a relative basis, rising only 10% while the S&P has roared higher by at least three times as much".
Current share price is $198,000.00 per share.
So 1990 5,500 to 2014 198,000 = 36 bagger (excl inflation etc) - how many people have ever enjoyed something like that.
so far almost outright rocketing, where the low is almost as good as the previous high, and it is rocketing in the sense that except 1997, the low always outdoes the high of 2 years ago,
but look what happens from 1998 to 2003:
1999: 52000 81100 high down -3.45% 2000: 40800 71300 high down -12.1%, low down -21.5% NOT GOOD 2001: 59000 75700 high up +6.2%, low up +44.6% 2002: 59600 78500 high up +3.7%, low up +1% 2003: 60600 84700 high up +7.9%, low up +1.7%
net change 1998 to 2003: high up +0.83%, low up +32.3%
buying into his fund is highly speculative, buy in at the wrong time and you could wait several years to make a profit.
eg the high in 1998 is 84000, but the low in 2009 is 70100, so 11 years later it still hadnt fully outdone the 1998 high. the yearly lows only outdo the 1998 high from 2010 onwards.
basically his fund was a good investment year on year up till 1998, but from 1998 onwards it is HIGHLY SPECULATIVE, buy in at the wrong time, and you could wait several years to make progress, and your trade could go negative even 11 years later!
this is not a coincidence but is because of the huge increase in internet trading from 1998, and probably also because of things like short selling.
Buffett is the archetype of fundamentals and dividend buy and hold, and from 1998 onwards its basically a gamble. in particular its not crash proof, eg the high of 2007 is 151650, and the low of 2009 is 70100, which is -53.8% lower! his fund crashed! a 50% decline is an outright crash, 30% IMHO is an unambiguous crash, 50% is outright, and say 80% is a wipeout.
everyone quotes Buffett, but nobody quotes the data of his fund!
RMG's local max of 1st August of 430 is still holding, todays high 429.8, possible resistance at 430
@DoctorShares P/E currently 3.35, published values of P/E are usually wrong. always calculate P/E directly. with one of my other potential rocket shares, Woodford has bought in by some huge amount. each fund is in fact an indicator, there is one fund where if they buy in its a sell signal! Woodford seems to be a buy signal.
Richard, it is worth remembering that a major "problem" for Warren Buffet's Berkshire Hathaway has been its own success - it is an absolutely huge fund. Regarding a buy and hold strategy, well, I think that it's somewhat premature to suggest that this approach has had its day. Terry Smith is a firm advocate and his Fundsmith offering seem to have performed rather well with a buy and hold strategy since he set it up in 2010. His model involves investing for the long term in a fairly concentrated portfolio of 20-30 shares. He does not go in for short term trading strategies. He and his team also "eat their own cooking".
I'm happy to hold on to my RMG holding and have been busy adding over recent weeks.
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