Should I sell some of my Berkshire stock

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artsic
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Should I sell some of my Berkshire stock

Post by artsic » Thu Nov 30, 2017 9:55 am

I'm retired, soon to be 66, will start social security at age 70, and expect our (married) tax bracket will go up at age 70.
I have apprx 550k in BRKB, and this represent about 33% of my portfolio. The remainder is in Vanguard with a 60/40 stock bond split.
My understanding is that there is no federal capital gains tax in the 10% and 15% tax brackets, and that is my tax bracket, at least until age 70.
My state income tax rate is 4.25% (Michigan)

My thought is to sell enough BRKB so that I stay in the 15% tax bracket, pay no federal capital gains, pay only state tax, then 33 days later either buy it back or reinvest in Vanguard Total Stock market. I figure I have 5 years in the lower tax brackets to do this, and could get about $40,000/ year out without paying the 15% capital gains tax. (paying only state income tax on the gains)

I have other taxable assets and IRA to pay for my living expenses for the next 5 years

Does this make sense?

PFInterest
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Re: Should I sell some of my Berkshire stock

Post by PFInterest » Thu Nov 30, 2017 6:36 pm

1/3 of your portfolio in 1 single stock?
yes sell.
put it in total stock, dont buy it back :oops:

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Re: Should I sell some of my Berkshire stock

Post by 808 » Thu Nov 30, 2017 6:49 pm

artsic wrote:
Thu Nov 30, 2017 9:55 am
... then 33 days later either buy it back or reinvest ...
No need to wait 33 (30) days. Wash sale rules only apply when the investment is sold for a loss. Even if you sold for a loss, buying into a "total market" investment is significantly different from something like Berkshire anyway. So, again, you could immediately purchase the replacement.

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Re: Should I sell some of my Berkshire stock

Post by 123 » Thu Nov 30, 2017 6:50 pm

We recently sold a BRKB position we held in an IRA. I wish it would have been in a taxable account, your situation sounds ideal. We just used the proceeds to increase our Vanguard Total Market position.Warren has undoubtedly been good to you. Say goodbye to BRKB before we have to say goodbye to Warren. Some would say that a future without Warren has already been priced into the stock, maybe or maybe not.
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Re: Should I sell some of my Berkshire stock

Post by livesoft » Thu Nov 30, 2017 6:51 pm

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Re: Should I sell some of my Berkshire stock

Post by BogleMelon » Thu Nov 30, 2017 6:57 pm

Yes you should sell. Putting third of your portfolio in one basket is way too risky, no matter whom that basket belongs too, no matter how this basket performed in the past.
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

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Re: Should I sell some of my Berkshire stock

Post by Grt2bOutdoors » Thu Nov 30, 2017 7:00 pm

Do it - start now, you have 31 calendar days before the 2017 tax year is up.
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davidsorensen32
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Re: Should I sell some of my Berkshire stock

Post by davidsorensen32 » Thu Nov 30, 2017 7:59 pm

I wouldn't sell. Read Buffet's annual letters. I believe Berkshire's intrinsic value is far greater than its market value. Almost all outcomes I can think about after Buffett passes away is favorable to the stock. Unless you need liquidity, I'd hold on to it forever. Your heirs will get a step up basis and thank you for it. Disclaimer - I have Berkshire. Its 16% of my total portfolio.
artsic wrote:
Thu Nov 30, 2017 9:55 am
I'm retired, soon to be 66, will start social security at age 70, and expect our (married) tax bracket will go up at age 70.
I have apprx 550k in BRKB, and this represent about 33% of my portfolio. The remainder is in Vanguard with a 60/40 stock bond split.
My understanding is that there is no federal capital gains tax in the 10% and 15% tax brackets, and that is my tax bracket, at least until age 70.
My state income tax rate is 4.25% (Michigan)

My thought is to sell enough BRKB so that I stay in the 15% tax bracket, pay no federal capital gains, pay only state tax, then 33 days later either buy it back or reinvest in Vanguard Total Stock market. I figure I have 5 years in the lower tax brackets to do this, and could get about $40,000/ year out without paying the 15% capital gains tax. (paying only state income tax on the gains)

I have other taxable assets and IRA to pay for my living expenses for the next 5 years

Does this make sense?

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Re: Should I sell some of my Berkshire stock

Post by Grt2bOutdoors » Thu Nov 30, 2017 8:39 pm

davidsorensen32 wrote:
Thu Nov 30, 2017 7:59 pm
I wouldn't sell. Read Buffet's annual letters. I believe Berkshire's intrinsic value is far greater than its market value. Almost all outcomes I can think about after Buffett passes away is favorable to the stock. Unless you need liquidity, I'd hold on to it forever. Your heirs will get a step up basis and thank you for it. Disclaimer - I have Berkshire. Its 16% of my total portfolio.
artsic wrote:
Thu Nov 30, 2017 9:55 am

I have apprx 550k in BRKB, and this represent about 33% of my portfolio. The remainder is in Vanguard with a 60/40 stock bond split.
My understanding is that there is no federal capital gains tax in the 10% and 15% tax brackets, and that is my tax bracket, at least until age 70.
My state income tax rate is 4.25% (Michigan)
You have 16% of your portfolio in Berkshire. The OP has double that exposure and is retired. Are you retired? If you need the assets to live on, would you lower your standard of living because of your conviction? The OP has significant risk in an undiversified asset - yes, yes, I know it's a collection of different businesses with significant cash flow. The risk is still concentrated in one holding. The OP should sell using tax arbitrage to his favor, let his heirs worry about how they will fund their own retirement. I suggest selling down to 10% or less, if you can.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: Should I sell some of my Berkshire stock

Post by technovelist » Thu Nov 30, 2017 9:32 pm

artsic wrote:
Thu Nov 30, 2017 9:55 am
I'm retired, soon to be 66, will start social security at age 70, and expect our (married) tax bracket will go up at age 70.
I have apprx 550k in BRKB, and this represent about 33% of my portfolio. The remainder is in Vanguard with a 60/40 stock bond split.
My understanding is that there is no federal capital gains tax in the 10% and 15% tax brackets, and that is my tax bracket, at least until age 70.
My state income tax rate is 4.25% (Michigan)

My thought is to sell enough BRKB so that I stay in the 15% tax bracket, pay no federal capital gains, pay only state tax, then 33 days later either buy it back or reinvest in Vanguard Total Stock market. I figure I have 5 years in the lower tax brackets to do this, and could get about $40,000/ year out without paying the 15% capital gains tax. (paying only state income tax on the gains)

I have other taxable assets and IRA to pay for my living expenses for the next 5 years

Does this make sense?
Yes, I would sell and buy something more diversified like Total Stock market.

And you don't have to wait to buy the new fund. The "wash sale" rules don't apply to your situation.
In theory, theory and practice are identical. In practice, they often differ.

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Re: Should I sell some of my Berkshire stock

Post by MrPotatoHead » Thu Nov 30, 2017 9:51 pm

I guess I would ask, do you want a yearly dividend, because that is what you are going to get with the total stock market. Berkshire doesn't pay a dividend so your tax management is far easier. You really don't have a single point of failure with Berkshire so the single stock analogies are really not applicable. It is up to you, but I would be inclined to hold and simply let my heirs decide what to do with it.

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Re: Should I sell some of my Berkshire stock

Post by technovelist » Thu Nov 30, 2017 9:58 pm

MrPotatoHead wrote:
Thu Nov 30, 2017 9:51 pm
I guess I would ask, do you want a yearly dividend, because that is what you are going to get with the total stock market. Berkshire doesn't pay a dividend so your tax management is far easier. You really don't have a single point of failure with Berkshire so the single stock analogies are really not applicable. It is up to you, but I would be inclined to hold and simply let my heirs decide what to do with it.
Yes, there certainly is a single point of failure, namely the management of Berkshire.

For a completely hypothetical example, what would happen if Berkshire engaged in a massive scandal of some kind? The stock would plummet.

That is (at least) far less likely to happen with a mutual fund, if it could even happen at all.
In theory, theory and practice are identical. In practice, they often differ.

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Re: Should I sell some of my Berkshire stock

Post by msk » Thu Nov 30, 2017 10:24 pm

123 wrote:
Thu Nov 30, 2017 6:50 pm
We recently sold a BRKB position we held in an IRA. I wish it would have been in a taxable account, your situation sounds ideal. We just used the proceeds to increase our Vanguard Total Market position.Warren has undoubtedly been good to you. Say goodbye to BRKB before we have to say goodbye to Warren. Some would say that a future without Warren has already been priced into the stock, maybe or maybe not.
+1
I was even more concentrated on BRK.B than the OP. Worked extremely well, for decades. But seeing what happened to GE after Jack Welch, and getting more and more nervous about Warren's age, I decided to call it a day and shifted to Total World. Focusing too much attention on the tax implications may turn out to be having focused on the wrong ailment.

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Re: Should I sell some of my Berkshire stock

Post by TomatoTomahto » Thu Nov 30, 2017 10:34 pm

We have one share of BRK.A remaining. Our heirs are going to enjoy the stepped up basis. It is our only voluntary exposure to an individual stock (we don’t have any say on unvested RSUs). It has done well for us, but so has PRIMECAP and TSM.

OP, I would tax gain harvest as much as you can, but save a couple shares for the nostalgia.
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Re: Should I sell some of my Berkshire stock

Post by sco » Fri Dec 01, 2017 11:27 pm

TomatoTomahto wrote:
Thu Nov 30, 2017 10:34 pm
We have one share of BRK.A remaining. Our heirs are going to enjoy the stepped up basis. It is our only voluntary exposure to an individual stock (we don’t have any say on unvested RSUs). It has done well for us, but so has PRIMECAP and TSM.

OP, I would tax gain harvest as much as you can, but save a couple shares for the nostalgia.
1 shared of BRK gets you a Geico discount, so I suggest the OP sells all except 1 share :)

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Re: Should I sell some of my Berkshire stock

Post by mw1739 » Sat Dec 02, 2017 7:20 am

BRK is our only individual stock, but I wouldn’t be able to sleep well with 33% in it. We recently cut it back from about 15% of our portfolio to 5%.

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Re: Should I sell some of my Berkshire stock

Post by UncleLongHair » Sat Dec 02, 2017 8:36 am

You didn't give your reasons for selling? Is it just because it's one large position?

The main risk facing Berkshire is obviously Buffett departing which is on the near horizon since he's 87. The question is what will happen to the company at that point.

Buffett and the board have been pretty clear about this. The company will currently buy back stock at a certain level of valuation (currently 1.2x book but this may change) which is about 20% below today's price. I think it is very likely that they will begin to pay a dividend. The company can easily support a 5% dividend going forward without any change to operations. Note that more than 25% of the company's market cap is made of up cash.

Berkshire is a single stock but owns about 100 businesses. Each of these businesses are above average, they provide better than average returns, have less than average debt, better than average competitive positions, and being owned by Berkshire they have better than average management, incentives, and access to capital. It is in a way an index fund, but of companies carefully chosen by Buffett.

Index funds like the S&P 500 are also collections of businesses essentially chosen with a different method, by market cap etc. I'd much rather choose businesses based on their fundamental qualities.

I have owned Berkshire for over 15 years and it is also a large position for me and I have no intention of selling. There will definitely be some "turbulence" when Buffett dies but, like Apple and other great American businesses, I believe it will continue and thrive afterwards.

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Re: Should I sell some of my Berkshire stock

Post by jfn111 » Sat Dec 02, 2017 8:57 am

I also own Berkshire but it's only 1% of the portfolio.
I was also about 15% of portfolio in MO. Having worked there for 33 years I accumulated a lot of stock. Over the last year I've cut that back to 5% and I still feel that's to high. 2018 goal is to get it to 1%.
I'll sleep well when MO and BRK are my only two individual holdings and they both are 2% or less of the portfolio.

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Re: Should I sell some of my Berkshire stock

Post by rimfire » Sat Dec 02, 2017 1:55 pm

Hi artsic,

Our portfolio is 34% BRK and I don't have any problem with it. Have owned it for years and bought more when I felt the market price didn't adequately reflect the real value of the company. You can certainly sell it to take advantage of the tax relief you will gain before you are 70. I would suggest selling as you need the cash to do other things. Retired for 2 1/2 years and loving ever minute of it.
BRK is a bit of funny duck but if you understand it it is great to own as you have probably found out.
This probably not the board to get an unbiased answer, as it primarily following the JB mantra. Post your questions on the BRK board on the Motley Fool and you will get answers more sympathetic to your question, even if they are a little biased to owning more :happy BRK rather then less.
Check out some of the comments of Mungofitch, rclosch and other comments on BRK on the Fool.

Thanks jb

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Re: Should I sell some of my Berkshire stock

Post by nedsaid » Sat Dec 02, 2017 2:43 pm

I have learned the hard way that bad things can happen to good companies and to good stocks. Learned my lesson the hard way with Lucent Technologies which seemed invincible, problem was the big shift from land lines to mobile phones. Much of the market for Lucent's products just went away and went away forever. The economy and the market are dynamic, things just don't stay the same.

I think Berkshire-Hathaway has a bright future but the company fits the unique personalities of Warren Buffett and Charley Munger. Hard to say if the successors will have the good sense not to micromanage the subsidiary companies. Never underestimate human ego. Smart people really can screw up a good thing. My guess is that the company will at some point be broken up after Buffett and Munger are gone and that should unlock shareholder value.

I just would not have 1/3 of my portfolio in one stock, even if it is Berkshire/Hathaway. In another thread, the downfall of General Electric is being discussed. GE looked pretty impregnable during the 1990's.
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Re: Should I sell some of my Berkshire stock

Post by DrGoogle2017 » Sat Dec 02, 2017 2:51 pm

I wouldn’t sell if it’s in your after tax account. He doesn’t pay dividend right. It’s not one stock, it’s multiple businesses there.

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Re: Should I sell some of my Berkshire stock

Post by Mordoch » Sat Dec 02, 2017 3:17 pm

DrGoogle2017 wrote:
Sat Dec 02, 2017 2:51 pm
I wouldn’t sell if it’s in your after tax account. He doesn’t pay dividend right. It’s not one stock, it’s multiple businesses there.
Its still ultimately essentially one company and there are inherent risks there beyond simply possibly a loss of investor confidence when Warren Buffet is no longer around.

As noted, the OP does have the option of splitting the sales so some is sold before the end of this calendar year and then some is sold next year and so on to potentially limit the capital gains impact. (As noted the main point is reducing exposure rather than taking a position the OP needs to actually sell all of their stock.) Ultimately putting just avoiding taxes ahead of all other potential risks is a bad idea.

Edit: It also appears fairly likely as another poster has noted that Berkshire Hathaway will ultimately start paying dividends which further weakens the tax benefit argument.

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Re: Should I sell some of my Berkshire stock

Post by Grt2bOutdoors » Sat Dec 02, 2017 5:14 pm

UncleLongHair wrote:
Sat Dec 02, 2017 8:36 am
You didn't give your reasons for selling? Is it just because it's one large position?

The main risk facing Berkshire is obviously Buffett departing which is on the near horizon since he's 87. The question is what will happen to the company at that point.

Buffett and the board have been pretty clear about this. The company will currently buy back stock at a certain level of valuation (currently 1.2x book but this may change) which is about 20% below today's price. I think it is very likely that they will begin to pay a dividend. The company can easily support a 5% dividend going forward without any change to operations. Note that more than 25% of the company's market cap is made of up cash.

Berkshire is a single stock but owns about 100 businesses. Each of these businesses are above average, they provide better than average returns, have less than average debt, better than average competitive positions, and being owned by Berkshire they have better than average management, incentives, and access to capital. It is in a way an index fund, but of companies carefully chosen by Buffett.

Index funds like the S&P 500 are also collections of businesses essentially chosen with a different method, by market cap etc. I'd much rather choose businesses based on their fundamental qualities.

I have owned Berkshire for over 15 years and it is also a large position for me and I have no intention of selling. There will definitely be some "turbulence" when Buffett dies but, like Apple and other great American businesses, I believe it will continue and thrive afterwards.

They said the same thing of General Electric. It only takes a string of bad managers to take something great and kill it. It took how many CEO's at GE? - 2.

It doesn't matter who picked the businesses, when the picker is gone, he's gone. When Munger is gone, he'll be gone too. Apple? a great business? - how was it before Jobs came back? It was on life support. Only in the last 12 years has it attained in your words "greatness". Funny thing about businesses, they can last in perpetuity, but I fail to see any of the great "horse and buggy" businesses around, do you? How about the original Dow 30 companies - how many of the 30 are still around? Sure they were great businesses back in their time, but nothing is forever.
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Re: Should I sell some of my Berkshire stock

Post by technovelist » Sat Dec 02, 2017 5:28 pm

Grt2bOutdoors wrote:
Sat Dec 02, 2017 5:14 pm
UncleLongHair wrote:
Sat Dec 02, 2017 8:36 am
You didn't give your reasons for selling? Is it just because it's one large position?

The main risk facing Berkshire is obviously Buffett departing which is on the near horizon since he's 87. The question is what will happen to the company at that point.

Buffett and the board have been pretty clear about this. The company will currently buy back stock at a certain level of valuation (currently 1.2x book but this may change) which is about 20% below today's price. I think it is very likely that they will begin to pay a dividend. The company can easily support a 5% dividend going forward without any change to operations. Note that more than 25% of the company's market cap is made of up cash.

Berkshire is a single stock but owns about 100 businesses. Each of these businesses are above average, they provide better than average returns, have less than average debt, better than average competitive positions, and being owned by Berkshire they have better than average management, incentives, and access to capital. It is in a way an index fund, but of companies carefully chosen by Buffett.

Index funds like the S&P 500 are also collections of businesses essentially chosen with a different method, by market cap etc. I'd much rather choose businesses based on their fundamental qualities.

I have owned Berkshire for over 15 years and it is also a large position for me and I have no intention of selling. There will definitely be some "turbulence" when Buffett dies but, like Apple and other great American businesses, I believe it will continue and thrive afterwards.

They said the same thing of General Electric. It only takes a string of bad managers to take something great and kill it. It took how many CEO's at GE? - 2.

It doesn't matter who picked the businesses, when the picker is gone, he's gone. When Munger is gone, he'll be gone too. Apple? a great business? - how was it before Jobs came back? It was on life support. Only in the last 12 years has it attained in your words "greatness". Funny thing about businesses, they can last in perpetuity, but I fail to see any of the great "horse and buggy" businesses around, do you? How about the original Dow 30 companies - how many of the 30 are still around? Sure they were great businesses back in their time, but nothing is forever.
Actually there were only 12 companies in the original Dow-Jones index. However, I believe the answer to "how many are still around" is 1: GE.
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Re: Should I sell some of my Berkshire stock

Post by artsic » Tue Dec 05, 2017 8:36 am

Many thanks to all the comments on my question. A couple clarifications.
-my reason for selling would be : 1. avoid the capital gains tax while I'm in a lower tax bracket
2. reduce my exposure to one company
-most likely I will need the money and not be passing it on to my heirs, so I will have to sell at some point
-Buffett has said they will have to start paying a dividend fairly soon, and obviously that would help my living situation
-I'm a bit leery of pouring money into the SP 500 right now, given valuations (see Buffett's GDP vs Total Market cap valuation) (fear vs greed)

Last question. If BRKB intrisic value significantly exceeds market value, ( as it may well), what action, at some point in time, causes this to become reflected in market value? (Buffett has said that businesses that they bought and subsequently failed, had to be written down to zero; where as businesses that succeeded have never been "written up" to their new value)

Again, thank you all for you input!

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Re: Should I sell some of my Berkshire stock

Post by p0nyboy » Tue Dec 05, 2017 8:48 am

I remember when brk-a was around $90,000...I thought..."who would ever buy this?" Now its $295,000 approx 10 years later. I think to myself..."who would ever buy this again?"

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Re: Should I sell some of my Berkshire stock

Post by TomatoTomahto » Tue Dec 05, 2017 9:54 am

p0nyboy wrote:
Tue Dec 05, 2017 8:48 am
I remember when brk-a was around $90,000...I thought..."who would ever buy this?" Now its $295,000 approx 10 years later. I think to myself..."who would ever buy this again?"
At one point yesterday, it almost broke over $300k mark. Our one remaining share has done well, but it would be expensive to sell. Some other year.
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Re: Should I sell some of my Berkshire stock

Post by technovelist » Tue Dec 05, 2017 9:59 am

TomatoTomahto wrote:
Tue Dec 05, 2017 9:54 am
p0nyboy wrote:
Tue Dec 05, 2017 8:48 am
I remember when brk-a was around $90,000...I thought..."who would ever buy this?" Now its $295,000 approx 10 years later. I think to myself..."who would ever buy this again?"
At one point yesterday, it almost broke over $300k mark. Our one remaining share has done well, but it would be expensive to sell. Some other year.
Is it possible to swap it for BRK.B without causing a taxable event?

Not that I have this problem...
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Re: Should I sell some of my Berkshire stock

Post by TomatoTomahto » Tue Dec 05, 2017 10:18 am

technovelist wrote:
Tue Dec 05, 2017 9:59 am
TomatoTomahto wrote:
Tue Dec 05, 2017 9:54 am
p0nyboy wrote:
Tue Dec 05, 2017 8:48 am
I remember when brk-a was around $90,000...I thought..."who would ever buy this?" Now its $295,000 approx 10 years later. I think to myself..."who would ever buy this again?"
At one point yesterday, it almost broke over $300k mark. Our one remaining share has done well, but it would be expensive to sell. Some other year.
Is it possible to swap it for BRK.B without causing a taxable event?

Not that I have this problem...
Yes, from what I understand it's got no tax event. I was actually wondering if that should be done before we bequeath it to kids. The step up in basis would be wonderful. If we eventually leave it to charity, no difference afaik.
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Re: Should I sell some of my Berkshire stock

Post by bgf » Tue Dec 05, 2017 11:27 am

artsic wrote:
Tue Dec 05, 2017 8:36 am
Many thanks to all the comments on my question. A couple clarifications.
-my reason for selling would be : 1. avoid the capital gains tax while I'm in a lower tax bracket
2. reduce my exposure to one company
-most likely I will need the money and not be passing it on to my heirs, so I will have to sell at some point
-Buffett has said they will have to start paying a dividend fairly soon, and obviously that would help my living situation
-I'm a bit leery of pouring money into the SP 500 right now, given valuations (see Buffett's GDP vs Total Market cap valuation) (fear vs greed)

Last question. If BRKB intrisic value significantly exceeds market value, ( as it may well), what action, at some point in time, causes this to become reflected in market value? (Buffett has said that businesses that they bought and subsequently failed, had to be written down to zero; where as businesses that succeeded have never been "written up" to their new value)

Again, thank you all for you input!
i dont think WB has said they are going to start paying a dividend soon. he has made comments about the difficulty of allocating cash as it exceeds $100b, but the last shareholder vote on dividends was pretty lopsided.

i am a bit astounded by the shouts about 'single company risk.' i know that you all own index funds, but those index funds own shares in single companies!

berkshire does not constitute his entire portfolio, and, even if it did, it would be spread out over dozens of different companies/subsidiaries and revenue streams, from chocolates to RRs to insurance to homes to tennis shoes etc etc.

1/3 Berkshire and 2/3 index funds has performed phenomenally well over the past several decades and will continue to do so.
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Re: Should I sell some of my Berkshire stock

Post by nisiprius » Tue Dec 05, 2017 1:35 pm

According to Morningstar, Berkshire Hathaway stock, BRK.A, originated on 5/19/1990, so it has existed for about 27 years, and the halfway mark is 2/24/2004.

5/19/1990 to 2/24/2004, average annualized return (CAGR): BRK.A 20.64%, Vanguard Index 500 fund (VFINX), 11.09%
2/24/2004 to 12/4/2017, average annualized return (CAGR): BRK.A 8.64%, Vanguard Index 500 fund (VFINX), 8.38%

The chart for the last half looks like this:

Source
Image

I'm not sure what this means, exactly, but it's something to know. In your situation I'd say that there's no obvious reason to do anything drastic in a hurry; I'd concern gradually moving from Berkshire to a suitable index fund, a small amount at a time.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

Boglegrappler
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Re: Should I sell some of my Berkshire stock

Post by Boglegrappler » Tue Dec 05, 2017 2:12 pm

I'm assuming that that graph is only applicable if both investments are held in a non-taxable account. Right?

In a taxable account the index fund dividends would require tax payments to be made, which would lower the rate of return shown.

delrinson
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Joined: Tue Sep 06, 2016 11:46 am

Re: Should I sell some of my Berkshire stock

Post by delrinson » Thu Feb 15, 2018 11:13 am

Stumbled upon this thread....we are 10% BRK.B (everything else in indices) and our cost basis for our remaining shares (sold a fair amount recently) is about $40...we've been shareholders for about 20 years. If we were to sell, our only tax liability would be at the state level (we're in the 12% federal bracket).

I also wonder about single company risk. While it really doesn't get any more bullet-proof than Berkshire (something that some Bogleheads fail to appreciate, in my opinion), who can say with any confidence where it will be in 30-40 years?

I'm going to maintain the 10% AA for the foreseeable future. Passive index investing, while certainly the way to go, is boring. Berkshire provides me with some relief from the tedium.

sco
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Re: Should I sell some of my Berkshire stock

Post by sco » Thu Feb 15, 2018 4:18 pm

I have 1 share for the Geico discount, it is amazing how close it tracks the index

delrinson
Posts: 186
Joined: Tue Sep 06, 2016 11:46 am

Re: Should I sell some of my Berkshire stock

Post by delrinson » Fri Feb 16, 2018 8:47 am

I will add that we bought the bulk of our shares in the Fall of 1999. Annualized return is about 10% over 18 years. S&P 500 over same period, all dividends reinvested, is just under 6.2%. So, yeah, glad to be a Berkshire owner.

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